OLD MU­TUAL EDGE 28 FUND:

Finweek English Edition - - FUND FOCUS -

100%

80%

60%

40%

20%

0% 11 22 22333 34444 5 /1 1 1 1 1 1 1 1 1 1 1 1 1 2 // ///// //// / / 1 36 9236 9 2369 2 6

00 0 100 0 10 00 1 0 for 30 years be­yond re­tire­ment.”

Brooke at­tributes the re­cent strong cap­i­tal f lows into Edge 28 to its mar­ket need; peo­ple seek­ing higher than av­er­age re­turns; and Old Mu­tual’s track record in the ac­tive man­age­ment space.

“Much of our out­per­for­mance so far has been the re­sult of good as­set al­lo­ca­tion, good eq­uity per­for­mances, and in­vest­ing cash more ef­fec­tively. It’s also been driven by a num­ber of dif­fer­ent coun­ters that you don’t typ­i­cally see in stan­dard port­fo­lios. These in­clude Capitec Bank, Rhodes Food Group and Telkom.”

Another con­tribut­ing fac­tor has been the out­stand­ing per­for­mance of do­mes­tic listed prop­erty, which has been trimmed down to about 4.5% of the port­fo­lio.

Edge 28’s out­per­for­mance speaks to MacroSo­lu­tions be­ing con­sid­er­ably more nim­ble than its larger com­peti­tors, Brooke notes. “How­ever, we ex­pect re­turns to slow down in the pe­riod ahead, a func­tion of the more ex­pen­sive mar­ket. But the na­ture of this fund should main­tain it as a front run­ner among bal­anced funds.”

In terms of as­set po­si­tion­ing, he and Karas have cut the fund’s do­mes­tic eq­uity com­po­nent to about 40% of the to­tal port­fo­lio, but re­main fully in­vested in off­shore shares, their pre­ferred as­set class. It makes up about 22% of the port­fo­lio.

“That has meant that a bit more cash has built up in the port­fo­lio, [in ad­di­tion to] listed prop­erty and bonds that we hold. [ This] al­lows for new buy­ing op­por­tu­ni­ties when they arise.”

The fund’s fixed in­come ex­po­sure is mainly con­cen­trated on South African long end bonds which of­fer high yields.

In its in­ter­na­tional eq­uity ex­po­sure, it has been over­weight Ja­pan and Europe, both of which per­formed well in the last pe­riod; it’s been un­der­weight emerg­ing mar­kets, help­ing it rel­a­tive to sev­eral com­peti­tors who’ve held big over­weight po­si­tions.

Brooke has l ight­ened t he f und’s hold­ing in l isted prop­erty, which he be­lieves will gen­er­ate less real re­turn go­ing for­ward. “Val­u­a­tions have be­come a bit stretched, but we have a sig­nif­i­cant po­si­tion in UK listed prop­erty com­pany Intu. More­over, we’ve picked up one or two smaller off­shore play­ers that should de­liver well in the long term.”

Edge 28 is in­vested in lit­tle over 7% in pri­vate eq­uity via broad-based ex­po­sure to a num­ber of dif­fer­ent play­ers and a num­ber of dif­fer­ent geogra­phies, in­clud­ing both in­ter­na­tional and Africa. Old Mu­tual is one of SA’s big­gest op­er­a­tors in this area.

Newspapers in English

Newspapers from South Africa

© PressReader. All rights reserved.