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Provided by the South African National Department of Health
1. The net of fee calculation assumes a 1.15% Annual Management Charge and a Total Trading Costs of 1% (both inclusive of vat) on the value of actual portfolio turnover
Equity markets recovered strongly in April following the sharp sell-off late in February and in March. As measured by the FTSE/JSE All Share Index (ALSI), SA equities reversed the negative trend, returning 14% on a total return basis. Global markets enjoyed a strong recovery, with developed markets up 11% and emerging markets up 8.1% in US dollar terms as investors reacted to stimulus packages, COVID-19 recovery themes and arguably, rare buying opportunity.
Locally, cyclical sectors recovered remarkably from the carnage in March. Chemicals (read Sasol) jumped by 83% off a depleted base, gold shares traded 50% higher and platinum counters enjoyed a 46% bounce. So-called SA Inc shares showed a more muted response to the new-found euphoria. Food and drug retailers declined by 3.6%, while food producers and healthcare services were flat over the month.
Bonds did not protect investors in the equity sell-off given the unique SA circumstances. However, bond prices did recover somewhat in April – the All Bond Index gained 3.9%. Cash provided a return of 0.52% in the month. After sustained pressure on local listed property counters, there was a ‘modest’ recovery of 7% off a very low base.
The portfolio recorded a return of -12.76% for the 12 months to the end of April, underperforming the benchmark return of -10.78%, but in line with the median peer return of -14.01%. The portfolio’s underperformance relative to the benchmark was driven by the overweight position in Sasol, partly countered by the positive effects of a relatively high cash holding in February and March when the market sold off.
When compared to competing general equity unit trusts, the portfolio was comfortably ahead of the peer group median over the past 12 months. Over three and five years, the portfolio achieved a top quartile positioning against peers.
April was again quite an active month for the portfolio, as market volatility created opportunities to purchase stakes in companies with sustainable business models at attractive prices, while recycling money from previous profitable trades. The portfolio increased its exposure to SA financials where we believe prices reflect near-term concerns rather than long-term fundamentals. We added a small stake in MTN.
The above purchases were funded from both cash and a reduction in the holding of British American Tobacco, which has substantially outperformed the market.
Alwyn Van Der Merwe
Sanlam Private Wealth is a holistic, integrated wealth management business that provides advice and manages assets for high net worth private individuals, cultural organizations, charitable institutions and similar entities with investable assets of more than R1 million
Participation in the Sanlam Private Wealth’s Equity Model Portfolio is a medium to long-term investment. The value of this portfolio is subject to fluctuation and past performance is not necessarily a guide as to its future performance. Calculations are based on a lump sum investment with gross income reinvested on the ex-dividend date. All performance figures exclude costs. Actual investment performance will differ based on the fees applicable, the actual investment date and the date of reinvestment of income. A schedule of fees and maximum commissions is available from the manager. Sanlam Private Wealth (Pty) Ltd, registration number 2000/023234/07, is a member of the Johannesburg Stock Exchange, a licensed Financial Services Provide (FSP 37473) and a Registered Credit Provide (NCRCP1867)
As a business we are committed to the principles of TCF, practicing a specific business philosophy that is based on client-centricity and treating customers fairly. Our clients can be confident they are dealing with a company where TCF is central to what we do and be reassured that we have a holistic wealth management product offering that is tailored to their needs, and a service that is of a high standard.
Tel: 021 950 2770
Farm 1, Vineyards Office Estate, 99 Jip de Jager Dr, Welgemoed 7530
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Tel: 021 861 3700
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Alwyn van der Merwe
Alwyn was appointed as Director of Investments for Sanlam Private Wealth in 2007. He has over 24 years' investment industry experience and managed institutional and unit trust portfolios successfully for 14 years. Alwyn leads and chairs Sanlam Private Wealth's formal investment committee.