Financial Mail - Investors Monthly - - Analysis: Unit Trusts -

It is early days for this fund, which is less than two years old, but it is worth look­ing at as it is run by the highly ex­pe­ri­enced Del­phine Goven­der, pre­vi­ously a di­rec­tor and se­nior port­fo­lio man­ager at Al­lan Gray. The fund has just R7m un­der man­age­ment.

Its lo­cal eq­uity hold­ings, which are about 51% of the fund, mir­ror those in the Per­petua in­sti­tu­tional port­fo­lios, but it does not have any for­eign eq­ui­ties, though about 15% of the fund, which is held in dol­lar cash, will soon be de­ployed into a range of global eq­ui­ties.

Goven­der says she is con­fi­dent that the in­ter­nal global eq­uity process is now ready to go live. Mark But­ler, from Aberdeen As­set Man­age­ment and Corona­tion, has been ap­pointed to con­cen­trate on global shares, though the en­tire eight-strong Per­petua Eq­uity team will play a part.

Goven­der says she ran both eq­uity and bal­anced port­fo­lios at Al­lan Gray and says most port­fo­lio man­agers pre­fer bal­anced, as they have a larger op­por­tu­nity set and more op­por­tu­nity to pro­vide real re­turns. Per­petua has a high track­ing er­ror of 7% and aims never to be a closet in­dex man­ager.

It had a heavy po­si­tion in re­sources, but has ro­tated into other cheap shares. Goven­der says the JSE has more cheap shares now than in the past more than three years. A third of the mar­ket is on a p:e be­low 10.

An­glogold Ashanti, for ex­am­ple, in­creased from R88/share to R300, and Per­petua sold some to buy beaten-down in­dus­tri­als such as Nam­pak at R17 (now R21) and Sun In­ter­na­tional at R70 (now R84). Goven­der also bought JSE Ltd at R120, which rose to R180, and Aspen, not the clas­sic value share, at R300, and it has since in­creased to R380. There was even a chance to buy Shoprite cheaply when it fell to R130. Per­petua bought it only to sell again as it moved back to R170.

Goven­der says the banks are par­tic­u­larly cheap: Standard Bank is the largest po­si­tion in the fund, but Bar­clays Africa is not far be­hind. Im­pe­rial is an industrial share that she con­sid­ers to be cheap, along with Net­care, and of the mega­caps she is happy to own a big slug of Bri­tish Amer­i­can To­bacco. “We need to be re­warded for the risk of be­ing dif­fer­ent, but we aren’t go­ing to be dif­fer­ent for the sake of it and ig­nore good busi­nesses.”

But the fund is small enough to play in the mid- and small-cap sec­tors, and has a ma­te­rial hold­ing in Datatec, for ex­am­ple.

The fund is up 17% in the year to date, about four per­cent­age points ahead of the JSE value in­dex. Goven­der says the fund is true value rather than deep value. BAT, for ex­am­ple, is a share that ranks well glob­ally among to­bacco shares and is highly de­fen­sive, with a re­li­able div­i­dend stream.

Goven­der talks about the value con­tin­uum, which in­cludes un­recog­nised growth shares as well as qual­ity shares. The fund is 51% in­vested in the JSE, in­clud­ing small ex­po­sures to prop­erty and the NewGold ETF, with 15% in dol­lar cash and 34% on lo­cal cash and money mar­ket as­sets.

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