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-
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-
SOURCE: Morningstar, 31 October 2012