Back­ing well-known names The fund aims to pro­tect at least 90% of in­vestors’ cap­i­tal on an on­go­ing ba­sis and is reg­u­la­tion 28-com­pli­ant. The fund tar­gets the growth of un­der­ly­ing cap­i­tal and achiev­ing in­creased in­come re­turns.

Finweek English Edition - - MARKETPLACE -

The fund is op­ti­mistic about the growth prospects of multi­na­tional me­dia com­pany Naspers*, ac­cord­ing to Asief Mo­hamed, man­ager of the fund and di­rec­tor of Aeon In­vest­ment Man­age­ment.

“The fund’s big­gest ex­po­sure is to Naspers,” says Mo­hamed. Aeon’s ap­proach is to value Naspers’ sub­sidiaries sep­a­rately, he ex­plains. In that re­gard, Ten­cent, the Chi­nese mo­bile-game com­pany in which Naspers holds a 34% stake, con­sti­tutes about 100% of Naspers’s val­u­a­tion.

“We ex­pect the com­pany to grow its rev­enue by about 25% over the next five years,” says Mo­hamed.

Other no­table eq­uity hold­ings in­clude Google par­ent Al­pha­bet Inc and Mi­crosoft, says Mo­hamed. The fund prefers bet­ter known names, he adds.

Al­most a fifth of the fund was in­vested in lo­cal fixed-in­come in­stru­ments such as bonds by the end of March. Most of these as­sets in­cluded short­du­ra­tion gov­ern­ment debt, says Mo­hamed.

“It is be­com­ing more and more dif­fi­cult to find new op­por­tu­ni­ties,” he says of the lo­cal eq­uity mar­ket.

The fund is on the look­out for value shares, he says. That’s why it bought Im­pala Plat­inum stocks ear­lier this year.

Ce­ment pro­ducer PPC also drew the fund’s at­ten­tion in Fe­bru­ary, Mo­hamed says. In­di­ca­tions are that PPC’s in­tended rights of­fer, where it plans to raise be­tween R3bn and R4.5bn to bol­ster its bal­ance sheet, may pro­ceed well, ac­cord­ing to him.

“We just need to get past this rights is­sue,” he says. The fund is skewed to­wards well-known com­pa­nies and takes a cau­tious ap­proach to­wards gov­ern­ment debt. It is also util­is­ing its full off­shore al­lowance of 25% in di­rect­ing cap­i­tal.

The fund’s to­tal in­vest­ment charge is low when com­pared to other bal­anced funds. In ad­di­tion, its re­turn has out­per­formed both its bench­mark and a few of its bet­ter-known peers over the past 12 months.

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