Striving to beat the JSE Alsi
The fund is a flexible portfolio that aims to provide investors with high long-term capital growth. FUND INFORMATION:
Fund manager insights:
Investors can expect similar market volatility and slightly better real returns this year than over the last two years, says Roger Williams, fund manager of the Centaur BCI Flexible Fund. This is thanks to the expectation of stable South African interest rates and improving economic growth, which should lead to improving profitability in SA.
“We view volatility favourably as it creates market confusion, allowing astute stock pickers to pick up quality companies below intrinsic value,” says Williams.
“Centaur’s best performance has come after extreme volatility where we cherrypicked the best stocks which recovered when volatility abated.”
The fund is for investors who have a moderate to high risk profile and require a taxefficient investment. According to Williams, it is ideal for an investor who requires high real returns, but does not have the risk appetite for a pure equity fund.
“Our mission at Centaur Asset Management is intelligent investing, which we achieve by implementing calculated moves to deliver optimal returns for our clients.”
He says growth in the developed world is robust, but rising interest rates in the US could lead to headwinds for global stock markets. President Donald Trump’s mooted trade policies are particularly concerning, says Williams, as they may lead to increased protectionism, which will be a long-term negative factor for the world economy.
Within SA the biggest factor is whether Pravin Gordhan stays on as finance minister and whether SA’s sovereign rating gets downgraded, says Williams.
“If these events occur, I would expect an upward step in SA’s cost of capital and equity market volatility. In the absence of a downgrade, I expect an improvement in confidence and a pick-up in economic growth, which hopefully will snowball into better economic momentum.”
Williams adds that Centaur’s investment philosophy weighs up value versus growth and quality: “This investment philosophy has been distilled into numerous heuristic models which allow us to identify exceptional investment opportunities. We have an experienced team of analysts who do in-depth research into our opportunity set.
“We then use our stock-picking engine and risk-management framework to decide which stock is worth including within our diversified portfolio of shares. In addition, we have proprietary macro-indicators which guide asset allocation.”
Why finweek would consider adding it:
The fund seeks to achieve returns above the JSE All Share Index with materially lower volatility and drawdowns.
The fund won a Raging Bull Award for the best South African Multi-Asset Flexible Fund for the best risk-adjusted returns over the five-year period ending December 2016, outperforming the All Share Index by 6% per annum with less than two-thirds of the volatility of that index.
The fund also won the Morningstar 2016 Award for the best flexible allocation fund due to its best risk-adjusted performance as at December 2016.