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-0.58  /  -0.68%

85.05

NAV on 2019/07/22
NAV on 2019/07/19 85.63
52 week high on 2018/09/04 94.1
52 week low on 2018/12/04 74.02
Total Expense Ratio on 2019/03/31 1.5
Total Expense Ratio (performance fee) on 2019/03/31 0
NAV Incl Dividends
1 month change -0.89% -0.89%
3 month change -0.36% -0.36%
6 month change 11.94% 11.94%
1 year change -0.85% 2.41%
5 year change 0% 0%
10 year change 0% 0%
Price data is updated once a day.
  • Sectoral allocations
Liquid Assets 1.50 1.99%
Offshore 74.02 98.02%
  • Top five holdings
COMMINTERBANK 10.08 13.35%
GUARANTYTRUST 6.14 8.13%
SAFARICOM 5.97 7.9%
MAROCTELECOM 5.74 7.6%
ATTIJARIWAFAB 5.22 6.92%
  • Performance against peers
  • Fund data  
Management company:
Sygnia Collective Investments RF (Pty) Ltd
Formation date:
2014/10/16
ISIN code:
ZAE000192274
Short name:
U-SAFEQFU
Risk:
Unknown
Sector:
Regional--Equity--General
Benchmark:
FTSE/JSE All Africa ex SA 30 (ZAR) net of fees
Contact details

Email
info@sygnia.co.za

Website
www.SYGNIA.co.za

Telephone
021-446-4940

  • Fund management  
Iain Anderson
Rian Brand


  • Fund manager's comment

Sygnia Africa Equity Comment - Mar 19

2019/06/07 00:00:00
Markets were driven higher over the first quarter thanks to improved support from central banks and governments despite the downward trajectory of economic growth. China has surprised to the upside with fiscal stimulus, while the Fed has stopped raising interest rates, reduced quantitative tightening and shifted its monetary policy towards an average inflation target. The ECB announced another round of quantitative easing, and emerging-market central banks are able to accommodate lower interest rates due to stronger currencies. The recovery in risky assets year-to-date reflects expectations of economic green shoots in the second half of the year thanks to this additional liquidity; however, bond markets are disagreeing with this view and are extrapolating current disappointing growth to the second half of the year. The US yield curve inverted, suggesting a recession is imminent, while the German 10- year Bund yield went negative for the first time in three years. Meanwhile, emerging market currencies are pricing another crisis, following the Turkish Lira's plunge.
Real gross fixed capital formation contracted for the fourth consecutive quarter in 2018 across all sectors which bodes poorly for future growth. The RMB/BER business confidence index (BCI) plunged to levels last seen during 2009's global recession. Confidence was further weakened as President Ramaphosa confirmed that the ANC will nationalise the South African Reserve Bank. Meanwhile, NERSA's tariff increases, the lack of tax relief in the budget, higher oil prices, and renewed stage four load shedding have all contributed to low consumer confidence. CPI remained lacklustre at 4.1% in March and the SARB kept rates on hold. Despite the higher tariffs, Eskom's liquidity position remains dire and it is the biggest risk to SA's economic growth and credit rating, although Moody's kept South Africa's rating outlook unchanged at stable. On the stock front, Aspen fell over 50% intraday after disappointing results with spiralling debt the main concern.
The Fed delivered a significantly more dovish outcome at its March meeting than expected, with the committee downgrading growth and inflation projections in line with recent data. US employment showed only slight growth, manufacturing slowed more than expected and consumer confidence dropped well below expectations. US consumer prices experienced the smallest increase in nearly two-and-ahalf years. As a result, the Fed effectively called an end to its hiking cycle with no hikes forecast this year. In addition, the committee announced that quantitative tightening will be lowered in May before being halted completely in October, effectively ending US quantitative tightening. The Fed is also willing to tolerate an overshoot of their inflation goal. However, despite this, the gap between the three-month treasury bill rate and the benchmark 10-year yield inverted for the first time since 2007. An inversion of that portion of the yield curve is seen as a reliable warning of a potential recession within the next year or two. The US trade deficit reached a 10-year high in 2018 on record imports from China, which continues to highlight the risks of the trade talks which are set to continue into April.
March's Eurozone manufacturing index fell to a near six-year low and investor confidence remained negative for the fourth consecutive month. The ECB downgraded growth and inflation forecasts and in recognition of the poor outlook, announced dovish policy changes. Rates are now expected to stay unchanged throughout 2019 and a third series of quarterly targeted longer-term refinancing operations (TLTRO-III) will be implemented.
Theresa May put forward a stripped-down version of her twice-defeated Brexit divorce deal to a vote in parliament, however, lawmakers rejected May's Brexit deal for a third time. May had announced she would resign if her deal went through. As a result, the EU's extension of the Article 50 period will only run until 12th April. Britain now needs to convince the EU it has an alternative path or exit without a deal, and the UK parliament's indicative votes process is set to start on the 1st of April.
The composite PMI rose to 53.8 indicating acceleration in activity. However, geopolitics remains a concern as tensions increased between India and Pakistan over the disputed Kashmir region, after an Indian MiG-21 fighter jet crashed near Pakistan. The pilot, who had safely ejected before the crash, was later paraded on Pakistani television. India heads for national elections in April.
Turkey entered its first recession in a decade at the end of last year and the Turkish central bank's net reserves slid $6.3 billion in the first two weeks of March to $28.5 billion, raising speculation that it was intervening to support the currency. As a result, the Lira sold off and the cost to borrow liras overnight rose above 1000% as Turkey's government attempted to support the currency. The Turkish lira fell after President Erdogan's ruling party lost control of key cities during the local elections on the 31st of March.
Core Machine Orders fell -5.4%, far below expectations, while output at Japanese manufacturers fell at the fastest pace in almost three years. The Bank of Japan held its monetary policy steady and predicted the economy is likely to continue its current moderate expansion.
China's industrial production grew at the slowest pace in nearly two decades in the first two months of the year and China's exports tumbled 20%, the biggest fall in three years. China lowered its official goal for economic growth in 2019 to a range of 6 - 6.5%, however, it announced several growth supportive measures, including US$298.31 billion in tax cuts. In addition, China said it will invest 800 billion yuan in railway construction and 1.8 trillion yuan to build roads and waterway projects. Fiscal policy is increasing steadily, including local bonds to the general public deficit, the total is a massive 6.5% of GDP. Initial March data indicates domestic demand is improving on the back of policy support.
Oil prices hit their highest levels of 2019 after OPEC committed itself to further output cuts and sanctions on Venezuela and Iran reduced supply.
FUND PERFORMANCE The Sygnia Africa Equity Fund maintained a diversified exposure to shares listed on Africa's most liquid stock exchanges, in line with its investment objective. The fund had a total return of 13.2% during the quarter, despite the rand being flat during the period. The largest contributor to the fund's performance was the Kenya equity market; a bounce back from the last quarter, as the Central Bank of Kenya kept its benchmark interest rate unchanged and the inflation rate increased at the end of the quarter. The Central Bank of Nigeria cut its benchmark interest rate in March, to stimulate the country's economy. The country's stock market was flat through the period, despite President Buhari's re-election being rejected by his opponents after the national elections held in February. Dangote Cement was deleted, and there were no additions to the fund during the period.
  • Fund focus and objective  
The portfolio shall consist primarily of financially sound African (excluding South African) listed and unlisted equity securities, property shares and property related securities listed on exchanges, warrants, fixed deposits, fixed interest instruments, money market instruments, other interest-bearing instruments and assets in liquid form. Where foreign equity securities are invested in, such securities will be listed on an exchange which has been granted full membership by the World Federation of Exchanges (''WFE''). Where such securities are not listed on an exchange which has membership of the WFE, the manager will ensure that it has applied the due diligence guidelines determined by the registrar in terms of the Act. In addition, the portfolio may comprise participatory interests in collective investment schemes, whether listed on an exchange or not, and other forms of participation in portfolios of collective investment schemes in accordance with the provisions of the Act and applicable legislation, as amended from time to time. Where the aforementioned schemes operate in territories other than South Africa, participatory interests or other forms of participation in such schemes will only be included in the portfolio where the regulatory environment of the relevant territory is to the satisfaction of the manager and the trustees of a sufficient standard to provide investors with protection at least equivalent to that offered to investors in South Africa. The Manager may include unlisted forward currency swaps, listed futures and option contracts for efficient portfolio management. To the extent that assets in the portfolio are exposed to exchange rate risk, the Manager may include listed and unlisted financial instruments for the exclusive purpose of hedging exchange rate risk subject to the conditions and limits stipulated by the Act. For the sake of clarity the Portfolio may also invest in contracts for difference and listed depository receipts.The effective African (excluding South African) exposure of the portfolio will always be above 80%. The effective equity exposure will be a minimum of 80% of the market value of the portfolio.The portfolio will not follow a specific theme and the manager will have the flexibility to take advantage of short-term, as well as long-term events and themes within securities markets. In selecting securities for this portfolio, where possible, the manager shall seek to deliver maximum capital growth over the medium to long term at a reasonable level of monthly volatility relative to the African (excluding South African) equity and fixed interest markets.
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