House View Portfolio Proposal

Transcription

1 House View Portfolio Proposal March

2 Content Topic Page Your Private Client Partner 3 Your Portfolio Managers 3 Efficient House View Portfolio 4 Efficient House View Portfolio Performance 5 Efficient House View Portfolio Statistics 6 Company Descriptions : Top 5 Holdings 7 Why Invest With Efficient Private Clients 8 Summary 8 The goal is not to have the longest train, but to arrive at the station using the least fuel. Tom Murphy 2

3 Your Private Client Partner FOCUS ON QUALITY Our focussed investment approach is based on a Quality philosophy. Quality investing is centred around investing in high quality businesses at attractive valuations. Efficient Select defines quality in terms of four critical aspects of an underlying company, namely: market position, business model, management and corporate governance as well as financial strength. Our quality approach seeks to identify companies with outstanding quality characteristics; companies we believe, over time, to deliver on our investors expectations. We construct portfolios based on this methodology and practise discipline when it comes to selecting the right entry and exit valuations. This has enabled us to consistently generate alpha (excess return above the benchmark). OUR TEAM The Efficient Select team comprises of eleven investment professionals with diverse qualifications, extensive experience and sound knowledge of the investment industry. We combine entrepreneurial spirit and intuition within the disciplined framework of our investment process in the management of our clients portfolios. Our boutique environment and team culture encourages growth and innovation within the maxims of honesty, integrity and respect. OUR SUPPORT Having made an investment decision does not automatically translate into returns, execution is equally important and essential in our company. With the proper systems in place to implement and monitor investments, manage risks and oversee compliance, our investment team can solely focus on delivering the performance that our clients expect. Your Portfolio Managers Robert Enslin, Head of Private Clients, Portfolio Manager BCom Honours, CFA Robert has been with Efficient Select since 2008 and has been the co-portfolio manager of Efficient Select s Specialist Funds since Besides his Portfolio Management role, Robert was also actively involved in equity research and making asset allocation decisions across Efficient Select s funds. Robert holds a BComm Honours degree in Financial Analysis from the University of Stellenbosch and is also a CFA charter holder. Luis Levy, Managing Director, Portfolio Manager BCom, CFA Luis obtained his B Com degree from the University of Cape Town and is a CFA Charter Holder. He started his financial services career in 1998 at Old Mutual and has gained valuable experience in fund management at several leading financial institutions. Luis was one of the founders of Mergence Investment Managers a company which he helped expand to assets under management in excess of R6 billion in institutional funds at the time of his departure. During his career he has also managed numerous retirement funds. As Managing Director of Efficient Select, Luis oversees the Specialist Manager Boutique and the progression of the company in the institutional market. 3

4 Recommended Portfolio Efficient House View Portfolio Portfolio Objective Efficient House View Portfolio is an actively managed direct equity share portfolio suitable for high net worth individuals. The portfolio aims to significantly outperform the FTSE/JSE All Share Index over a 3 to 5 year period, by investing in a concentrated portfolio constructed from Efficient s best investment view. The portfolio will typically hold no more than 25 high quality equities at any point in time. The emphasis is on active stock selection and bottom-up fundamental research. The objective of the Efficient House View portfolio is to provide investors with capital growth over the medium- to long-term, by targeting returns in excess of the FTSE/JSE All Share Index over the stated investment horizon. At Efficient Select we manage portfolios in accordance with our Quality Investment Philosophy and Process. Our investment philosophy is based on the following key principles: We seek to invest in high quality business at attractive valuations. We believe our in-depth proprietary research process will identify superior long term investment opportunities We invest for the long term. We look to hold an investment for at least three to five years unless the investment case changes significantly. Portfolio Composition Top 5 Holdings Weighting in Portfolio Naspers Ltd 8.21 FirstRand Ltd 5.25 US DBX-Tracker 5.13 SABMiller Plc 5.03 BHP Billiton Plc

5 Recommended Portfolio Efficient House View Portfolio Performance Annualised Performance 6 Months 1 Year 2 Years 3 Years Since Inception 1 July 2011 (Cumulative) HOUSE VIEW PORTFOLIO FTSE/JSE ALL SHARE INDEX ALPHA Houseview Std Dev ¹ Benchmark Std Dev Information Ratio²

6 Recommended Portfolio Efficient House View Portfolio Statistics Risk - 1 Year House View Fund FTSE/JSE All Share TR ZAR Sector Min Median Max Stdev Tracking error Information Ratio 5.80% 4.41% % 3.67% 1.08% % 3.86% % 8.44% 2.69 Notes: 1. Standard Deviation - How widely the returns varied over a certain period of time. E.g. When a fund has a high standard deviation, the predicted range of performance is wide, implying greater volatility. 2. Information Ratio (IR) - A ratio of portfolio returns above the returns of a benchmark (usually an index) to the volatility of those returns. The IR measures a portfolio manager's ability to generate excess returns relative to a benchmark, but also attempts to identify the consistency of the investor. This ratio will identify if a manager has beaten the benchmark by a lot in a few months or a little every month. The higher the IR the more consistent a manager is and consistency is an ideal trait. 6

7 Recommended Portfolio Company Descriptions: Top 5 Holdings BHP Billiton The group occupies significant positions in major commodity businesses, including aluminium, energy coal and metallurgical coal, copper, manganese, iron ore, uranium, nickel, silver and titanium minerals, and has substantial interests in oil, gas, liquefied natural gas and diamonds. The group has a high quality portfolio of assets that spans a wide range of commodities and countries. It also boasts a strong balance sheet and good cash generation that allows it add to add additional assets to its portfolio when prices are depressed. The group is, however, vulnerable to a number of external variables like commodity prices and exchange rates, which has a significant effect on group profitability, but is not under control of management. This leads to significantly higher forecasting risk. The increased capacity utilisation and broad based growth in the United States, Germany and France bode well for future growth. This growth should be further aided by the approval of new projects. First Rand FirstRand provides a comprehensive range of products and services to the South African market and niche products in certain African and international markets. The Group is differentiated by its portfolio branding approach and there are a number of leading financial services franchises within the Group, such as Rand Merchant Bank (RMB), First National Bank (FNB) and WestBank. FirstRand is a premier financial services provider with a strong, diversified portfolio of businesses that remains poised for long term growth. The gradual economic recovery and cost management should continue to support the group's results in the short term. Naspers Naspers Limited, is a multinational media group. The Company s segments include Internet, pay television, print media and related technology in emerging markets. Its principal operations are in Internet platforms (focusing on commerce, communities, content, communication and games), pay-television and the provision of related technologies and print media, including publishing, distribution and printing of magazines, newspapers and books. It has operations in Africa, China, Latin America, Central and Eastern Europe, Russia and India. In April 2011 the group acquired a 85% interest in 7Pixel, an e-commerce group. In July 2011 the group acquired a 80% interest in Vipindirim Electronic Services plc. In July 2011 the group acquired 100% interest in Slando Limited. In December 2011 the group acquired a 90% interest in Fashion Days. Effective March 12, 2013, the Company acquired Avito Holding AB. SAB Miller PLC SABMiller plc is one of the world s largest brewers. It has a brewing presence in over six continents and a portfolio of strong brands and markets that range from developed economies such as the USA to fast-growing developing markets such as China and India. The group s wide portfolio of brands includes premium international beers such as Pilsner Urquell, Peroni Nastro Azzurro, Miller Genuine Draft and Grolsch, as well as leading local brands such as Aguila, Castle, Miller Lite, Snow and Tyskie. SABMiller plc is also one of the largest bottlers of Coca- Cola products in the world. DBX US Tracker Fund The MSCI USA Index reflects the performance of the United States of America equity markets. The Index contains about 600 constituent securities representing companies with a total market capitalisation of approximately US$14 trillion. The MSCI USA Index is recognised as a barometer of the United States of America economy and as the holder of db x-trackers MSCI USA Index ETF; an investor will essentially track the United States of America equity markets. 7

8 Conclusion Why Invest With Efficient Private Clients Our portfolios are constructed in accordance with our Quality Investment Philosophy based on the following: We believe in investing in high quality businesses at attractive valuations. Wealth is preserved and created by following a long- term low turnover strategy. We follow an unconstrained, high conviction approach to investing which proves to generate additional returns. Transaction costs erode investment returns, based on this our low turnover strategy also provides low execution fees. Given our size we are able to optimally construct investment portfolios that consist of multiple asset classes across multiple geographies ranging from fixed income to equities. We believe that investing in quality affords us a higher probability of success and guards against capital losses. We offer personalised and specialised investment solutions and welcome personal interaction with the portfolio manager. Quarterly reporting and statements are supplemented by online access to view your portfolio. You can diversify your portfolio through a transparent and cost effective structure. Summary We would like to thank you for the opportunity to present this proposal. At Efficient Private Clients we take our role as your Private Client Portfolio Manager very seriously and our primary goal will always be to grow your wealth over the long term. We also strive to be attuned and attentive to your investment requirements while being committed to prompt, personalised and efficient service at all times. We look forward to engaging further with you in the near future. 8

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