SIM TOP CHOICE EQUITY FUND

The fund’s mandate is clearly modelled on Coronation Top 20. It aims to hold about 20 shares at all times. But it has been a competitive product in its own right, with an annual return over the past five years of more than three percentage points ahead of the shareholder weighted index (Swix).

It was run by Patrice Rassou until he left to join Ashburton last year. But there is continuity as the support portfolio manager Cromwell Mashengete is now in the chair along with co-head of equities Andrew Kingston. Top Choice has no offshore allocation.

Kingston is probably the biggest Naspers fan in the SA investment community, so it is no surprise to see a massive 18.5% exposure to the JSE’s biggest gorilla. Mashengete says that in fact this is an underweight position against the Swix, but the team is reluctant to commit 20% of the portfolio to one share. There are also risks around regulation in China of internet giants such as Tencent, which is by far the largest asset in Naspers.

Apart from Naspers, the largest industrial is MTN (4%), which is considered an oil proxy given its dependence on the Nigerian economy.

The fund has a 43% exposure to resources, including 7.5% in Sasol. Mashengete admits that it held the share right through the R21 a share trough but it has added to it on the way up. He says the high carbon emissions weigh on Sasol, but he is optimistic that its coal-to-oil technology could be adapted to produce clean energy one day.

Anglos (8%) and BHP (6%) are both in the top five shares. The fund has taken profits on some platinum shares, though Implats remains the third-largest share, accounting for 8% of assets, and Sibanye is sixth at 6%.

In mid-2020, the fund acquired a position in FirstRand during the short window when it reached fair value. It now makes up 5.5% of the fund. It kept its holdings in the “cheaper” banks, Absa and Standard Bank, each about 4.5% of the fund. With about 15% in the banking sector it has no plans to add more.

Fund data supplied by ProfileData Fund Analytics

The information, data, analyses and opinions above do not constitute investment advice, and all information should be verified before using it. Do not make any investment decision without the advice of a professional financial adviser.