CAPE JOINT PENSION FUND

Transcription

1 CAPE JOINT PENSION FUND Annual General Meeting 21 May 2004 STERLING FINANCIAL SERVICES Andrew Jones-Phillipson Presentation Structure Role of the Trustees Inflation and Rand Fund s Portfolio Structure Fund s Performance Relative to Benchmark Domestic and Offshore Markets Sector Performance and Benchmarks? Fund Investment Performance vs. Inflation Asset Managers BEE Credentials

2 Nobody can predict: interest rates the future direction of the economy the stock market Peter Lynch: Fidelity (1993) Role of Trustees Monitor adherence to the agreed investment policy Take account of objectives, nature and term of liabilities and funding methods Devise and update investment policy and strategy aimed at achieving the Fund s objectives Ensure compliance is reported annually to FSB Ensure observation and compliance of regulation requirements

3 Role of Trustees Consider and review investment protection methods, such as hedging Consider alternative investments when market dictates Monitor investments on a monthly basis Review asset mangers monthly Trustees hands-on! EXTERNAL INFLUENCES - INFLATION The Effects of Inflation Shopping basket: - 2 litres of milk 750g of a cheaper brand instant coffee a loaf of bread 500g of cheddar cheese 500 g of apricot jam 500g of beef mince a 100g slab of chocolate a toilet roll 12 extra large eggs 500g of rice 500g of butter Sep Dec 2003 R July 1970 July 2001 R R3.24 July 1990 Sept 2002 R Sep May 2004 R29.24 R115.19

4 Inflation: Going Up?????? SA Rand / US$ Source: Igraph 11/05/04

5 CJPF - Growth of Assets- Domestic 31 March 04 Market Values (Rm) Mar-04 % Weight OMAM % RMB % Futuregrowth 53 2% Umbono 51 2% Coronation % Sanlam % Investec % Fraters 64 3% Prescient % Property 17 1% Total 2, % World Indices Periods to % Change Year YTD 0.34 Mth Periods to % Change Year YTD 3.42 Mth Periods to % Change Year YTD 1.34 Mth Periods to % Change Year YTD 3.37 Mth

6 CJPF - Growth of Assets- International Since Inception Mar 04 Market Values (Rm) Inception Value Mar-04 OMAM Edge Investements Aurum Ltd Peers SA Total Total International As as 31 March % of Total Assets FUND S DIRECT PROPERTY INVESTMENTS

7 BOE Building, Zomland Office Park Zomerlust Estates, Paarl Valued at R 19 million Imperial Bank Terraces Ground Floor & Third floor, Tyger Waterfront A, Carl Cronje Street, Bellville Valued at R 4.2 million and R 3.7 million

8 FUND S DOMESTIC ASSET MANAGEMENT BLACK ECONOMIC EMPOWERMENT CREDENTIALS Domestic Managers BEE Credentials South African asset management industry currently manages R 1.24 trillion of wealth, roughly equal to three times the GDP of South Africa The industry is well established but also highly competitive Given their position as the custodians of wealth, asset managers can play an important and significant role in advancing economic empowerment. Black Economic Empowerment (BEE) has been identified by the Fund as being an essential component in the growth and evolution of the industry This has been documented publicly in the form of the recently published Financial Charter

9 Domestic Managers BEE Credentials The Fund has nine domestic asset managers (OMAM,RMB,Umbono,Coronation,Sanlam,Futuregrowth, Investec,Fraters, Prescient) All are committed to BEE and fully supports the Financial Sector Charter (FSC) Findings from Empowerdex Survey: 1. More than half of the asset management companies have BEE ownership exceeding 25 percent 2. Fund s asset managers having the most BEE ownership are Umbono, Fraters, Futuregrowth and Prescient 3. Two of the Fund s asset mangers is ranked in the top five as the most empowered players in the asset management industry 40% Asset Class Performance Tax at 0% Fixed Deposit Gilts Equities (Rolling 10 Years) 30% 20% 10% 0% Taxat0%

10 Performance Domestic Mar 04 20% Fixed Interest vs Inflation (Rolling 10 Years) 15% 10% 5% 0% Fixed Deposit gilts Inflation Performance Domestic Annualised FYTD Bmk 1 Year Bmk 2 Year Bmk 3 Year Bmk Weighted performance 16.3% OMAM 5.1% 5.3% 12.8% 12.4% 17.5% 17.9% 14.6% 14.5% RMB 5.4% 5.3% 13.5% 12.3% 18.4% 19.5% 14.8% 14.8% Umbono 0.6% 0.7% Futuregrowth 5.8% 5.2% Investec 33.2% 32.6% 49.9% 49.7% 8.5% 5.6% 13.3% 10.9% Frater 27.1% 26.6% Coronation 23.0% 22.5% 35.0% 34.7% 12.3% 10.0% 14.4% 13.0% Sanlam 22.7% 22.3% 34.2% 33.8% 10.1% 10.1% 13.0% 13.7% Prescient 2.8% Futuregrowth & Fraters (8 Mths) Umbono (5 Mths) Prescient (4 Mths)

11 Bond Protection Strategies Fund Hedge Profits Prior to 2004 R May 2004 R Total Banked R 86.6 million 3.0% 2.5% 2.0% 1.5% 1.0% 0.5% Performance relative to Benchmark 12 Month to Mar % Coronation Sanlam Investec Fraters OMAM RMB Futuregrowth Prescient

12 Large Manager Watch 3 Years to 31 March % 5% 10% 15% 20% 25% Allan Gray Cape Joint Pension Prudential RMBAM OMAM Coronation Investec Average Median Stanlib SIM Global Unique Quaystone Limited Metropolitan