Not bet­ter’

Finweek English Edition - - COMPANIES & INVESTMENTS - Per­for­mance of In­vestec Op­por­tu­nity Fund Out­per­for­mance rel­a­tive to peer group av­er­age

parate mar­ket con­di­tions.

In our view there are sev­eral key rea­sons why this out­per­for­mance has been con­sis­tent and why we would not agree with the ag­gre­gated con­clu­sions drawn in your ar­ti­cle.

It is a well-known fact that cap­i­tal has a ten­dency to move to ar­eas where it can gen­er­ate at­trac­tive risk-ad­justed re­turns.

It should not come as a sur­prise that the funds men­tioned have a strong longterm track record of out-per­for­mance.

The study in the Fin­week ar­ti­cle ref­er­ences a 2010 ar­ti­cle, based on 2008 data, which has not been ad­justed to 2012 fig­ures.

The mar­ket cap­i­tal­i­sa­tion of the JSE has more than dou­bled since 2008 and this in­crease in mar­ket value of op­por­tu­ni­ties has to be fac­tored into the anal­y­sis, sug­gest­ing a so-called “max­i­mum eq­uity man­date size” should be ex­panded from R10bn to R20bn, or a Balanced Strat­egy should be ex­panded f rom R22bn to R44bn.

The study as­sumes an equal trad­ing men­tal­ity by man­agers en­ter­ing and ex­it­ing po­si­tions within 10 days. This is not the philo­soph­i­cal ap­proach the In­vestec Op­por­tu­nity Fund has. Turnover statis-

15.0%

12.8%

9.1%

17.2%

20

10

0 tics for our fund sug­gests far longer hold­ing pe­ri­ods of four years or longer for po­si­tions on av­er­age. Many po­si­tions have been held for more than seven years.

By be­ing an in­vestor, rather than a trader, bet­ter longer-term de­ci­sions can be made that cre­ate the con­di­tions for su­pe­rior per­for­mance, as we are very aware of the cost im­pact of sub­stan-

1.8%

2.6%

2.9%

3.3%

SOURCE: Morn­ingstar, 31 Oc­to­ber 2012

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