Mandate Overview10 Oct 2019
The fund aims to earn a higher total rate of return than that of the South African equity market, as represented by the return of the FTSE/JSE Capped All Share Index including income, without assuming greater risk.
Mandate Limits10 Oct 2019
SA equity exposure between 80% and 100%, with balance
invested in cash and other JSE listed securities.
Foord Equity comment - Sep 19 - Fund Manager Comment10 Oct 2019
- Global equities (+2.1% in US dollars) recovered August¡¦s losses, led higher by Japan (+4.0%) on solid earnings and Europe (+2.7%) on lower interest rates and a central bank stimulus surprise ¡V the US (+1.7%) also rose on the second Fed interest rate cut in two months, while emerging markets (+1.9%) also advanced.
- The FTSE/JSE Capped All Share Index (+0.3% in rands) rose as unexpectedly benign comments from Moodys pushed financials (+3.5%) higher ¡V industrials (-0.7%) fell and resources (-1.1%) were dragged lower by a sharply weaker gold mining (-14.9%) sector as precious metals fell on improved risk sentiment.
- Index and fund heavyweight Naspers unbundled its global digital assets into Amsterdam-listed and Naspers-controlled Prosus ¡V in the corporate action, the managers elected to take the full allotment of Prosus shares given the value unlock.
- Portfolio holdings Aspen (+9.2%), Bidvest (+8.6%) and FirstRand (+6.2%) all contributed notably ¡V the investment in JSE-listed UK property stock Capital & Counties (+15.6%) also rose sharply as fears of a hard Brexit waned with the UK prime minister appearing to strike a more conciliatory tone.
- Oil (+0.6%) was slightly higher following a missile attack on Saudi Arabian processing facilities that drove a mid-month price spike ¡V core holding Sasol (-12.1%) detracted as their overdue US ethane cracker project continues to weigh on investor sentiment.
- Gold (-3.5%) fell on improved risk sentiment after a strong year-to-date performance ¡V the portfolio retains a meaningful exposure to the physical gold ETF as an attractive and liquid alternative store of value.
- The rand (+0.4% vs the US dollar) advanced strongly intra-month but weakened latterly ¡V the portfolio has a weak-rand bias given the structurally weak macro-economic fundamentals and continued political and policy uncertainty.
- The fund is defensively constructed with good diversification and high levels of liquidity ¡V well positioned to take advantage of increasingly attractively priced long-term investment opportunities.