Consistent high returns for medium risk
The primary objective of the Centaur BCI Balanced Fund is to offer investors a moderate long-term total return. FUND INFORMATION:
Fund manager insights:
At Centaur Asset Management “we believe in intelligent investing”, says Roger Williams, the fund’s manager. According to him, this entails deploying a multitude of proven investment strategies, which allows them to identify excellent opportunities whilst providing diversification. “We combine this with strong risk-management processes to reduce volatility and preserve capital,” he explains.
The fund utilises numerous time-tested asset allocation and stock-picking strategies to outperform its benchmark. He says the fund is for investors that have a moderate risk capacity but require good real returns. This includes retired individuals for whom a monthly income can be drawn off this fund.
Williams says Centaur’s investment philosophy weighs up value versus growth and quality and has been distilled into numerous heuristic models which allow them to identify exceptional 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 portfolio,” he says. “In addition, we have proprietary macro-indicators which guide asset allocation. Our methodology seeks to create a portfolio with the best risk-reward ratio for our investors.”
He says the recent downgrade increases the risk premium of South Africa, resulting in high real interest rates that curb consumer expenditure and investment. Economic confidence remains low and economic policy direction is uncertain, resulting in sluggish economic growth. The SA economy and currency is vulnerable to increased risk aversion when international conditions deteriorate. “Investors’ return and volatility expectations should be similar to the last two years,” he explains.
The fund has 16% of its assets invested directly offshore. “But in the absence of heightened international risk aversion we think the rand will remain relatively stable. Nevertheless, rand strength will be used as an opportunity to increase international exposure,” according to Williams.
“We have 40% of the fund in fixed interest and property stocks from which we expect returns of 10%, underpinning the return of the fund. We have increased exposure to Africa via investment in MTN and PPC as these companies’ share prices are depressed, yet we anticipate a strong pick-up in economic growth in Africa, which these companies will benefit from.”
Why finweek would consider adding it:
Since inception in July 2013 the Centaur BCI Balanced Fund has managed to outperform the benchmark by more than three percentage points and deliver consistently high returns with only medium risk.
Earlier this year the fund won the Raging Bull Award for top-performing SA High Equity Multi-Asset Fund for the three-year period ending December 2016.