NAV on 2019/01/15
|NAV on 2019/01/14
|52 week high on 2018/04/30
|52 week low on 2018/02/01
|Total Expense Ratio on 2018/09/30
|Total Expense Ratio (performance fee) on 2018/09/30
STANLIB Collective Investments (RF) Limited
South African--Interest Bearing--Short Term
STeFi Composite Index
Malcolm Holmes has 11 years investment experience and has been a portfolio manager in his own right, which makes him the perfect candidate to oversee the evaluation of the underlying managers and their portfolios. As the head portfolio manager, Malcolm is the key person responsible for product development and design at STANLIB Multi-Manager. He is responsible for ensuring that our products meet their investment objectives and that the underlying managers meet their mandates.
STANLIB Multi-Manager was established in 1999 and is the centre of excellence for multi-managed solutions within STANLIB. The investment team, led by Chief Investment Officer Joao Frasco, consists of an experienced team with a diverse set of investment skills. We have offices in Johannesburg and London, and currently have mandates in excess of R90 billion under stewardship.
STANLIB Multi-Manager Funds are designed to deliver superior investment returns more consistently than through a single asset manager or mandate. Our approach allows investors’ to outsource the fund / manager selection decision, which includes the ongoing due diligence of managers and construction of portfolios, to meet pre-defined objectives over time.
Risk management is a fundamental component of our investment philosophy and process and is therefore approached holistically. It permeates every part of our investment process, requiring participation and accountability from all individuals involved in the process.
In addition to investment knowledge, Jennifer brings valuable experience and diversity to the team and it is expected that she will contribute at the highest level. Jennifer joined the team from Standard Bank Group Securities where she was an Equity Analyst covering Media, Electronic and IT stocks. She has over seven years of investment experience and has been highly rated in her area of expertise.
STANLIB MM Enhanced Yield comment - Sep 18
The global trade war between the United States and China continued to dominate headlines during the quarter. The US intensified tariffs on Chinese goods and China retaliated. Despite the tussle between the two economic giants, the US economy remains strong. This is visible in the rally of the US dollar and their robust labour market. These positive developments gave the Fed room to hike interest rates in September from 2.0% to 2.3%. Unfortunately, the higher developed market (DM) interest rates and stronger US dollar do not bode well for emerging market (EM) assets such as South Africa, and most EM countries saw their currencies weaken. SA fared worse than its EM peers as signs of poor economic growth surfaced during the quarter, resulting in SA moving into a technical recession. SA bonds returned 0.8% return largely driven by short-dated instruments, which were up 1.9%. The 12+ area of the curve returned 0.4%. SA cash gained 1.8%. The SA Reserve Bank (SARB) Monetary Policy Committee (MPC) decided to keep the repo rate unchanged at 6.5% when it met in September, but has a hawkish view on inflation.
The Fund continued to deliver good performance with positive active returns of 0.3% over the quarter, with all the underlying managers outperforming the STeFi composite. Over the year, the alpha versus the benchmark has been 1.5%.
The leading contributors to performance were STANLIB Income, Aluwani and Prescient. Prescient was consistent, maintaining its shorter duration positioning relative to Aluwani and STANLIB. Aluwani had the longest duration positioning, while STANLIB was in between these managers. The portfolio construct remains sound and has delivered to expectations.
Both money market funds, Investec and STANLIB, were positive contributors to performance delivering reasonable returns during the quarter.
Portfolio positioning and outlook
Trade wars could weigh heavily on EMs coupled with additional rate hikes in the US, with SA possibly having to follow suit given a deteriorating inflation outlook. This is due to exchange rate depreciation as well as the rising trend in world oil prices and uncertainties about future electricity tariff increases which pose the main upside risks to the inflation outlook. While the SARB forecasts that inflation will peak at 5.9% in the second quarter of 2019, the MPC would prefer the inflation rate closer to 4.5%.
On the positive note, both global and local investors continue to monitor the initiatives of the SA government to boost the economy, attract foreign investment and to root out corruption. The Fund currently has 53.4% in money market or cash plus funds, while still having a healthy allocation to income-oriented assets coming through from Aluwani and STANLIB. The fund therefore currently has a balanced position. Duration – a measure of the sensitivity of the price of a fixed-income investment to a change in interest rates. Duration is expressed as a number of years.
The Fund is an enhanced cash plus solution that invests in short-term interest earning and money market instruments. It is diversified across different types of money market, enhanced yield and income type strategies to ensure that the Fund is conservative, liquid and competitive in the ASISA Interest Bearing Short Term sector.
The Fund is benchmarked against the STeFI Composite Index, with the aim of delivering regular income distributions and performance in excess of money market return.