"It's not always easy to do what's not popular, but that's where you make your money." - John Neff

The JSE All Share index gained +2.7% in rand terms in August. The best-performing sectors were coal mining (+20.2%), industrial transportation (+16.4%) and platinum mining (+9.7%). The worst performing sectors were industrial engineering (-5.6%), beverages (-4.9%) and electronic & electrical equipment (- 4.8%). August delivered positive returns, mainly driven by resources and interest rate sensitive sectors as resources (+4.5%) and financial indices (+2.9%) outpaced industrials (+1.9%). Mid-caps (+4.5%) outperformed large caps (Top 40 at +2.6%) and small caps (+2.2%). Inflation-linked bonds (+0.2%), nominal bonds (+1.0%) and listed property (+0.8%) all delivered marginal gains over the month. Cash returned +0.6%.

An uncertain operating and political environment has partially been mitigated this year by supportive external factors such as firming global growth, improved global trade, steady to improving commodity prices, weaker US dollar and appetite for higher yielding assets (such as South African nominal bonds). This has seen the rand fairly stable, albeit volatile around political events. A number of these factors alongside marginal improvements in the local economy are expected to support a positive Q2 GDP number and help the local economy out of technical recession.

The Nedgroup Investments Private Wealth Equity Fund August 2017 (Fund: 0.04% versus SWIX40: 2.33%)

The Fund underperformed its SWIX40 benchmark by 2.28% in August. The Fund's non-benchmark positions in Adapt IT and EOH have been sources of ongoing underperformance. Encouragingly, recent data points, including full year results from Adapt IT (diluted normalised HEPS of +14.8%) and a full year trading statement from EOH (HEPS +10% to +20%), have confirmed that the intrinsic value of both of these businesses continue to grow at acceptable rates. Both of these counters trade on particularly undemanding ratings given the quality of the underlying businesses and their respective prospects, in our view. While SA Inc. companies in general face dire trading conditions, we take comfort from the fact that we are positioned in the strongest of these businesses, short-term market perceptions aside.

During August the Nedgroup Investments Private Wealth Equity Fund pared back its position in Discovery and exited Tiger Brands both at rich levels offered by the market.

The NGI Private Wealth Equity Fund will change it's name to Nedgroup Investments Private Wealth Equity Fund, effective from 01 April 2017.

Nedgroup Investment Advisors

"The single greatest edge an investor can have is a long-term orientation." - Seth Klarman

The JSE All Share index gave up ground in rand terms in the final quarter of 2016, shedding 2.1%. The top three performing sectors during the quarter were telecommunications, industrials, and financials which returned 6.7%, 5.3% and 2.9%, respectively. The laggards during the period were consumer services (-11%), healthcare (-10.7%) and basic materials (-1.2%).

The Nedgroup Investments Private Wealth Equity Fund in the fourth quarter of 2016 (Fund -2.58% vs Swix40 -4.72%)

The fund outperformed its Swix40 benchmark by 2.1% during the fourth quarter of 2016 and by an encouraging 4.1% for the year under review. The fund's performance in 2016 is indeed gratifying given the market travails which unfolded over the period.

Over a more meaningful investment horizon and based on Morningstar data as at 31 December 2016, the fund is the number one ranked SA General Equity fund over 10 years; a true measure of a long-term orientation. We have taken the opportunity to write a comprehensive review of the performance of the house and of the Nedgroup Investments Private Wealth Equity Fund in a separate document under the title Investment Performance Review of 2016, which is available upon request.