NAV on 2019/03/22
|NAV on 2019/03/21
|52 week high on 2018/09/05
|52 week low on 2018/03/27
|Total Expense Ratio on 2018/09/30
|Total Expense Ratio (performance fee) on 2018/09/30
Sanlam Collective Investments
South African--Multi Asset--Low Equity
30% FTSE/JSE All Share Index / 70% STeFi Composite Index
No email address listed.
No website listed.
Fund Manager Comment - Dec 18
Economic Market Overview
2018 turned out to be a disappointing and difficult year for growth asset investors, both locally and globally. We believe structural drivers and long-term fundamentals should reward growth assets and by default risk-seeking investors over the longer term, yet this was however not what investors experienced over the last 12 months.
Global economic growth appeared strong and coordinated in the first 9 months of 2018 leading into the last quarter. Market sentiment remained positive and risk appetite appeared strong which in turn made most market pundits reasonably optimistic on market prospects going into quarter 4. What transpired tested the resolve of even the boldest risk seeking investors.
While some volatility has been clearly evident across most growth assets over the entire year, the last quarter was particularly negative with the pullback seen in the price of Brent Crude oil, probably being one of the best illustrations of the change in economic conditions and outlook.
The price of oil reached a 4 year high in October 2018 – breaking $86 per barrel on the back of strong demand and supply concerns out of the Middle East. Unfortunately, the demand conditions changed quickly as a growing number of market participants struggled to determine the medium to long term effects of trade tensions between the US and China. Another contributing factor to the significant price drop was the possibility of even greater tightening of global monetary conditions on the back of continued interest rate increases being pushed through by the US Fed. These and other factors resulted in the price dropping to a low of $50 per barrel on 24 December 2018. The price did recover some of the losses ending the year at $54 per barrel or negative move of almost 35%!
Market participants started to doubt the narrative around synchronised global growth while concerns around the possible impact of tighter Global Central Bank monetary policies impacted investor confidence and analyst expectations. This in turn resulted in growth assets losing their allure forcing down medium-term expectations and causing significant pain across most equity markets.
Short-term volatility continues to present patient investors with opportunities across a number of different sectors, assets and geographies yet there are numerous risks and uncertainties which might impact these investments negatively over the next few months.
The Ampersand Sanlam Collective Investments CPI+2% Fund of Funds generated a return of -2.47% for the quarter. The SA inflation plus 2% fund objective and Portfolio Benchmark (30% J203T/70% SteFi) returned 1.60% and -0.16% respectively. The underperformance of the fund is due to our South African Listed Property exposure which has been under significant pressure as well as our offshore component.
Position going forward
Our key positions across the portfolios have remained consistent for the majority of the past 12 months.
Over the past 18 to 24 months we continued to increase the effective diversification while reducing the overall risk within all our portfolios, as we were not completely comfortable with the dominant narrative in the broader market. Unfortunately, this coincided with a significant increase in volatility across most assets but specifically growth assets which impacted all of our portfolios.
During certain market cycles these strategies have added significant value and resulted in significant outperformance and protection. Unfortunately, over the past 12 months this has not been the case as our strategy to diversify the portfolios away from local fixed income assets detracted significantly from performance due to the continued decrease in global risk appetite and increased risk aversion.
The Ampersand Momentum CPI Plus 2 Fund of Funds portfolio is an asset allocation fund of funds portfolio. The portfolio aims to generate positive returns over the short term while beating inflation by two percent over a three-year rolling period. The portfolio will be managed to achieve stable growth and will comply with the Prudential Investment Guidelines at all times. In order to achieve this objective, the assets normally included in the portfolio will consist of assets in liquid form and participatory interests of portfolios of collective investment schemes or other similar schemes in equity, bond, money or property markets, registered in South Africa, or portfolios of collective investment schemes or 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. The portfolio may invest in multi-asset class portfolios and is not limited to certain asset classes. The manager will be permitted to invest on behalf of the portfolio in offshore investments as permitted by legislation. The portfolio will aim to achieve a minimum of 20% and a maximum of 30% in equity exposure. The trustees shall ensure that the investment policy, as set out above, is adhered to, provided that nothing in this supplemental deed shall preclude the manager from varying the ratios of participatory interests, to maximise capital growth and investment potential in a changing economic environment or market conditions or to meet the requirements, if applicable, of any exchange formally recognised in terms of legislation and from retaining cash or placing cash on deposit in terms of the deed and the supplemental deed; provided that the manager shall ensure that the aggregate value of the assets comprising the portfolio shall consist of participatory interests and assets in liquid form of the aggregate value required from time to time by the Act. The manager will be permitted to invest on behalf of the portfolio in offshore investments as permitted by legislation. The portfolio shall be subject to all relevant provisions of the deed, as amended by this supplemental trust deed, the Regulations and any relevant further supplemental deeds entered into in the future. For the purpose of this portfolio, the manager shall reserve the right to close the portfolio to new investors on a date determined by the manager. This will be done in order to be able to manage the portfolio in accordance with its mandate. The manager may, once a portfolio has been closed, open that portfolio again to new investors on a date determined by the manager. The manager shall determine the critical size from time to time.