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0.58  /  0.58%

100.26

NAV on 2019/07/19
NAV on 2019/07/18 99.68
52 week high on 2018/08/29 109.63
52 week low on 2018/11/23 91.57
Total Expense Ratio on 2019/03/31 1.6
Total Expense Ratio (performance fee) on 2019/03/31 0
NAV Incl Dividends
1 month change -1.18% -1.18%
3 month change -4.11% -4.11%
6 month change 3.19% 3.64%
1 year change -2.13% 0.34%
5 year change 0% 0%
10 year change 0% 0%
Price data is updated once a day.
  • Sectoral allocations
Basic Materials 85.69 24.18%
Consumer Goods 28.93 8.17%
Consumer Services 32.11 9.06%
Derivatives 0.00 0.00%
Financials 98.44 27.78%
Health Care 0.99 0.28%
Industrials 46.50 13.12%
Liquid Assets 0.86 0.24%
Other Sec 0.80 0.22%
Technology 60.03 16.94%
  • Top five holdings
 NASPERS-N 60.03 16.94%
 SASOL 23.15 6.53%
 FIRSTRAND 19.24 5.43%
 BATS 17.60 4.97%
 ABSA 15.90 4.49%
  • Performance against peers
  • Fund data  
Management company:
Sygnia Collective Investments RF (Pty) Ltd
Formation date:
2016/01/19
ISIN code:
ZAE000207973
Short name:
U-SYGNGEQ
Risk:
Unknown
Sector:
South African--Equity--General
Benchmark:
JSE/FTSE Shareholder Weighted All Share Index (J403T)
Contact details

Email
info@sygnia.co.za

Website
www.SYGNIA.co.za

Telephone
021-446-4940

  • Fund management  
Kevin Williams
Sygnia Asset Management (Pty) Ltd.


  • Fund manager's comment

Sygnia Growth 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 Growth Equity Fund returned 5.7% for the quarter, underperforming its benchmark, the FTSE/JSE SWIX Index, which returned 6.0%. An underweight position in Naspers and precious metal miners were the key detractors from performance, while overweight positions in traditional duel-listed stocks and select mid-cap opportunities benefitted performance. During the quarter the Fund continued to increase its exposure to select SA facing mid-cap companies, in line with its investment objective of providing long-term capital appreciation by investing in companies which are expected to grow their earnings at above-average growth rates.
  • Fund focus and objective  
The Sygnia Growth Equity Fund is a general equity portfolio that seeks to identify and invest in companies expected to grow their earnings at above average growth rates. The fund management approach will be to construct portfolios from the bottom-up, based on independent fundamental research and valuations. The manager will also look to identify those companies they consider to be in a growth phase, defined by the fact that they are entering or are already dominant in a market segment that is expected to enjoy above average growth prospects for the foreseeable future. While the fund will not be averse to investing in stocks with higher that average Price-Earnings ratios, the manager will also have the ability to invest in shares with low Price-Earnings ratios whom the manager deems to have above average earnings growth prospects. Assessment of management culture and business strategy will be key to this type of investment.
The Fund will primarily invest in large and mid-sized companies from a range of industry sectors, and will be a concentrated portfolio. This is to ensure that the return from investment opportunities is maximised and not diluted away by an over-diversified portfolio. The portfolio will consist of high-conviction positions, generated by company-specific investment cases that meet the growth criteria set out by the manager. A strong sell-discipline is key within this portfolio and positions will be trimmed as the expected return of any given position declines, either due to a change within the business, or due to share price appreciation.
The portfolios investment universe consists of financially sound equity securities, preference shares which generate capital growth as a result of their earnings growing faster than the average, property shares and property related assets in liquid form. The portfolio may also invest in participatory interests and other forms of participation in portfolios of collective investment schemes, registered in South Africa and other similar schemes 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 and which is consistent with the portfolio's primary objective.
The portfolio may from time to time invest in financial instruments, in accordance with the provisions of the Act, and the Regulations thereto, as amended from time to time, in order to achieve the portfolio's investment objective. The manager may also include unlisted forward currency, interest rate and exchange rate swap transactions for efficient portfolio management purposes. The portfolio's equity exposure will always exceed 80% with the balance, if any, invested in assets in liquid form.
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