NAV on 2019/09/19
|NAV on 2019/09/18
|52 week high on 2019/08/19
|52 week low on 2018/11/29
|Total Expense Ratio on 2019/06/30
|Total Expense Ratio (performance fee) on 2019/06/30
STANLIB Collective Investments (RF) Limited
Global--Interest Bearing--Variable Term
95% Barclays Global Aggregate Bond Index; STeFI Composite 5%
After completing his articles at Alex Aitken and Carter he joined UAL Merchant Bank in 1979, initially assisting as a portfolio manager and later working as an investment analyst. After completion of a full time MBA he relocated to the USA where he spent nine years as a stockbroker/financial consultant, mostly with Shearson Lehman Bros. He returned to South Africa in 1992 and joined Old Mutual Invesments with involvement in portfolio management and client report backs. He joined SCMB Asset Management division in 1995, after a stint in portfolio management at RMB Asset Management. Paul Hansen is responsible for managing the onshore portion and Fidelity Investment Managers the offshore portion.
Brandywine Global Investment Management
STANLIB Global Bond Feeder Fund - Jun 19
The fund returned 3.42% for the first quarter of 2019 compared to the benchmark return of 2.44%. The year to date outperformance can mainly be attributed to the increased exposure to the US coupled with the weakening of the South African rand. The rand ended the quarter weaker, at R14.50/$, after trading at R14.38/$ at the end of 2018. The rand remains volatile due to economic uncertainty and a low growth environment in SA.
The fund grew in market value from R844 million at the end of 2018 to R913 million at the end of March 2019.
Performance during the first quarter was strong, with support coming from both currency and bond market positioning. The biggest contribution to absolute performance came from the bond overweight positions, with U.S. and Mexican duration delivering the bulk of the gains. An overweight position in U.S. Treasuries and short-dated U.S. dollar-denominated corporate bonds contributed positively to performance. As the Fed lowered expectations for near-term rate hikes, Treasury yields rallied and finished the quarter lower along the curve. Lower rates and the benign Fed outlook also fostered a constructive environment for both investment grade and high yield corporate bonds. An overweight to long-dated, local-currency Mexican bonos position was particularly beneficial to returns. Bonos also rallied across the yield curve, buoyed by the Bank of Mexico’s stance, the more dovish Fed outlook, improving economic activity, and rising commodity prices. Indonesian bonds also added gains to the portfolio, rallying as the Fed’s new dovishness enabled the Indonesian central bank to keep its policy rate steady. The lack of exposure to Japanese sovereigns and low-yielding European duration detracted from performance as most developed bond markets participated in the broad bond rally during the quarter.
The most significant contributor to relative performance was currency positioning. The portfolio did not own euros, which weakened early in the year, accounting for the majority of the currency attribution. The remainder came from positioning in emerging currencies, including the South African rand, Malaysian ringgit and Indonesian rupiah, with the biggest return coming from the Mexican peso. The most detrimental currency exposure was to the Swedish krona, which continued to bear the brunt of questionable Riksbank policy compounded by weak inflation and disappointing retail and manufacturing data.
The portfolio remains broadly underweight the dollar. Duration is roughly equally split between U.S. exposure, mainly in long-term Treasury bonds, and select emerging market local-currency sovereign bonds. The overall effective portfolio duration is slightly below the benchmark.
Duration in other developed country markets remains virtually absent. The rest of the duration exposure remains invested across numerous emerging country sovereign bond markets, the largest and most persistent being an unhedged allocation to Mexican bonos. A gradual stabilization in the global economy with suppressed yields in the developed world is an inviting scenario for yield compression with the developing world.
The fund also remains significantly underweight U.S. dollars with a bearish outlook. Global economic data may continue to weaken owing to time lags, but policy shifts from the China and the U.S. should lead to a reversal of the deteriorating global economic trend. We believe this development will benefit the emerging market overweight position.
The commentary gives the views of the portfolio manager at the time of writing. Any forecasts or commentary included in this document are not guaranteed to occur.
The STANLIB Global Bond Feeder Fund will be a specialist feeder fund portfolio. The Manager will
seek to achieve an investment medium for investors, which shall have as its main objective longterm
growth of capital and income. Apart from assets in liquid form, it will consist solely of
participatory interests in a single portfolio of a collective investment scheme operated in territories
with a regulatory environment which is to the satisfaction of the manager and trustee of a sufficient
standard to provide investor protection at least equivalent to that in South Africa, namely the
STANLIB Global Bond Fund.