f or the fund’s stellar performance in 2014, fund manager Sean Ashton begins with what wasn’t in the portfolio. The fund’s minimal exposure to resources meant that it missed the dismal returns from the sector that weighed down many of its peers.
“From a resources point of view, we were concerned about China rebalancing its economy to a more consumer-led economy, a model that is a lot less steel intensive than growth over the past 10 years. With most of the large general miners on the JSE having a massive component of income coming from iron ore, we didn’t think their earnings were going to be sustainable.”
This aversion included getting out of Sasol as the oil price began to fall. “We don’t think prices will move back to $80/ barrel that quickly given that a world of abundant oil means that the marginal barrel is less important in setting prices,