Financial Mail - Investors Monthly - - Analysis: Unit Trusts - Fund data sup­plied by Pro­fileData Fund An­a­lyt­ics The in­for­ma­tion, data, analy­ses and opin­ions above do not con­sti­tute in­vest­ment advice, and all in­for­ma­tion should be ver­i­fied be­fore us­ing it. Do not make any in­vest­ment de­ci­sion with­out the advice of a pr

Fund man­ager Tony Ca­dle says the house has a dif­fer­ent phi­los­o­phy from its com­peti­tors as it takes a top-down ap­proach, look­ing at the global macros be­fore it de­cides what shares to buy.

It has about 48% in lo­cal eq­ui­ties, with the rest al­most equally di­vided be­tween lo­cal bonds & cash and off­shore as­sets. The fund has a con­cen­trated port­fo­lio of 30 shares. Naspers alone makes up more than 11% of the eq­ui­ties, Bri­tish Amer­i­can To­bacco 9% and Stein­hoff 7%. The only re­source share in the top 10 is Sa­sol, and there is less than 14% in the ba­sic ma­te­ri­als sec­tor.

Ca­dle says this al­lo­ca­tion did not work be­tween Fe­bru­ary and April, when re­source shares ral­lied on the back of a stim­u­lus pack­age out of China. He says that in spite of that, the fun­da­men­tals for re­sources are not promis­ing. The fund has a 21% ex­po­sure in its eq­ui­ties to fi­nan­cials. The big­gest hold­ing is in Ash­bur­ton’s ul­ti­mate con­trol­ling share­holder, RMB Hold­ings. It has a heavy bias to­wards rand hedge in­dus­tri­als and its top hold­ings in­clude Richemont, SABMiller, Reinet, Aspen and Medi­clinic.

Ca­dle says Ash­bur­ton has a team-based ap­proach in which the de­ci­sion mak­ing is shared by the an­a­lysts and the port­fo­lio man­agers. The fixed in­come portion of the port­fo­lio is run by the Ash­bur­ton fixed in­come team, which was en­hanced at the end of last year with the pur­chase of At­lantic In­vest­ment Man­age­ment. The fund has a mod­est 5% hold­ing in SA Prop­erty.

Ca­dle is con­cerned that the as­set class is now at the tail end of the bull mar­ket, though he be­lieves prop­erty could still do rel­a­tively well if global de­fla­tion bites deep and global growth slows.

The fund has al­most a full al­lo­ca­tion to for­eign as­sets of about 24%, but Ca­dle is con­cerned that a low-growth Europe will have a knock-on ef­fect on the US mar­ket — which to date has been much stronger. Against this he finds emerg­ing mar­kets quite at­trac­tive.

The fund cel­e­brated its third birth­day on June 1, and it has been a top-quar­tile fund since in­cep­tion. Ca­dle be­lieves that now that it has a three-year track record it should gather a rea­son­able pool of as­sets. It has less than R500m un­der man­age­ment at present.

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