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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
Along with emerging markets, South African equities rebounded firmly in December with the FTSE/JSE All Share Index (ALSI) posting a total return gain of 3.3%. Increased clarity regarding trade negotiations between the US and China, and a Conservative Party victory in the UK local elections boosted the so-called risk-on trade. Global markets were strong, emerging markets leading the way with a 7.5% advance in equity prices, while the MSCI World Index gained 3.0% in US dollar terms.
The SA resources sector gained 7.0% in December, followed by industrials (+2.3%). SA financials managed to eke out a total return of only +0.7%. It was another very strong month for precious metal equities. The top SA resources equity sector performance came from gold (+19.5%) and platinum (+17.6%), followed by chemicals (+13.2%). Losing sectors were populated by industrial and financial counters. The telecoms sectors struggled again, with fixed line losing -25.7% and mobile down 9.0%. The All Bond Index (ALBI) return of 1.9% was the best monthly performance of H2 2019. Cash returned 0.6%. SA listed property was the worst performing asset class, shedding 2.1%.
These monthly returns were instrumental for the Q4 2019 outcome. In Q4, the ALSI posted a total return of +4.6% versus -4.6% in Q3. Cash and the ALBI each posted a total return of +1.7% in Q4 (+1.8% and +0.7% respectively in Q3). Listed property was the Q4 2019 overall asset class loser with a total return of +0.6%.
The portfolio delivered a return of 9.5% for the 12 months to the end of December, in line with the peer group average of 9.5%. The portfolio achieved this performance despite the relatively conservative asset allocation stance – low local and global equity exposure – both these asset classes ended the year strongly. When compared to competing medium-equity unit trusts, the portfolio was comfortably positioned in the top half of the peer group over the past 12 months, but remains in the top quartile of the peer group over five years.
The equity exposure in the portfolio was maintained at 55%. Since we hold the view that we are in an advanced stage of a global equity bull market, the equity position is underweight relative to the maximum allowable equity exposure of 65%. We maintained the property holdings in the portfolio. The South African fixed interest exposure remains conservatively positioned.
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 Conservative Balanced 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
Tel: 021 950 2300
Tel: 021 672 1888
Tel: 021 861 3700
Tel: 011 778 6600
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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.