Fund manager insight
SINCE INCEPTION, the fund has often been the best unit trust across all categories for its life. As per its name, the fund has a very flexible approach and is benchmark agnostic.
Performance fees are charged at 12.5% on a two year rolling average above the benchmark. As you are aware, the fund has returned approximately 21% net, to investors, per annum compounded since inception.
The fund does not follow any investment process based on any one index, but rather follows a bottom-up fundamental theme based upon the team’s assessment of the best companies, in the best industries that best suit the current economic and regulatory environment that we find ourselves in.
At present, the team is bearish on the domestic economy in South Africa due to a worsening current account, a stretched consumer, and a Government, which has done little to promote growth and employment, or provide the investment world with a comprehensive plan for the path to growth. We therefore have 20% of our assets sitting offshore, invested in predominantly US conglomerates, including McDonald’s and Johnson & Johnson, while most of our domestic portfolio exposed to SA listed companies have offshore operations, rand-hedge qualities, or are not reliant on growth from SA.
We are gravely concerned about the prodigious pace at which credit has been advanced to unsuspecting consumers, and the consumers’ inability to repay these loans due to the exorbitant rates that are being charged.