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REPORTS

Whether we are making adjustments to our own funds or providing clients with investment advice, it is always based on extensive research provided by our investment committee.

Reports are updated on a quarterly basis.

Stringfellow | Q4, 2017 – Investment Highlights

Delivered | January 2018

Stringfellow Group met with our trusted investment committee over at BIP and ran through our quarterly investment report for Q4, 2017.

We’ve highlighted several key points which may be of interested to you as we move into the next quartile. 

Please remember this information stems from a comprehensive investment report. Should you wish to gain a better understanding or meet with us in person, please send a quick note to info@stringfellow.co.za.

Highlights

  • multi-manager funds are able to exploit more investment opportunities/convictions compared to the single manager.
  • Stringfellow Group has more than 21 opportunities within our Fund of Funds (Multi-managed funds). Based on a detailed fundamental valuation exercise of various investment opportunities, our high-level asset class preferences are as summarised below:
  • Within an expansion phase“, it is important for investment managers to;
    • Be mindful of implementing appropriate investment style tilts within their high-level asset allocation.
    • Be mindful of implementing appropriate geographical allocation tilts within their high-level asset allocation.
      Asset allocation must be in favour of all growth assets, where valuations allow
    • and South Africa is most likely in this phase currently.
  • Economic growth bottomed out in 2017, and while it may not match the high growth rates of other EM markets like India and China, it will, in all likelihood, be supported by the prevailing strong global environment and continue to improve.
  • Global investor confidence in SA’s financial markets also seems to be halting its deteriorating trend, which could result in substantial flows into SA this year, especially if a good budget is delivered in March of 2018. The implied catch up in foreign flows, in a globally constructive environment, can fuel a strong ZAR overshoot.
    • Stringfellow Group has taken precautions to protect our portfolio from a ZAR overshoot, as well as a likely violent rotation out of expensive Rand hedge stocks, into attractively valued cyclical and domestic orientated stocks.

Stringfellow Stable – December 2017

  • The Stringfellow BCI Stable Fund of Fund finished the fourth quarter of the year on a positive note. Returns were ahead of both the SA MA Low Equity peer group average, as well as its CPI+3% benchmark.
    • 5 year performance (9.33%)
    • 7 year performance (10.32%)
  • The strength in the Rand towards year-end had a greater negative impact on the fund’s performance, as it impacted the value of the fund’s offshore holdings. Despite the atrocity however, the Stringfellow Stable Fund delivered a Steller performance over the 3-month period, returning top quartile returns, far ahead of its peers.Most of this outperformance can be attributed to the fund’s positioning in cheap, undervalued assets that have the ability to produce above-average returns, like Emerging Markets and Japan (to name only a few).
    There were no manager allocation changes made to the fund over the last quarter.

Stringfellow Flexible – December 2017

  • The Stringfellow BCI Flexible Fund of Fund, over the long-term, has delivered returns above both the SA MA Flexible peer group average, as well as its cpi +7 benchmark.
    • 5year performance 12.06%
    • 7 year performance 13.20%
  • Over the most recent quarter, the Stringfellow Flexible FoF produced a good return, outperforming the SA MA Flexible peer group average and its CPI+7% benchmark.Over the longer, 7-year period, which is the fund’s investment horizon, returns are well ahead of its CPI+7% benchmark and peer group average. The fund has, therefore, met both its investment objectives and client expectations.There were no manager allocation changes made to the fund over the last quarter.

Performance quoted is over a 5 year period as at 31/12/2017
Past performance is no guarantee of future performance

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