MONTHLY PORTFOLIO REPORT October 2015

Transcription

1 Funds MONTHLY PORTFOLIO REPORT October th Floor, Protea Place, 40 Dreyer Street, Claremont. Postnet Suite 64, Private Bag X1005, Claremont, T +27 (0) DIRECTORS: DP du Plessis (Chairman) SA Blades MB Logan DA Polkinghorne PS Stewart Grindrod Asset Mangement (Pty) Ltd. Reg No. 2004/024647/07. An Authorised Financial Services Provider (FSP 29834)

2 Table of Contents Page Asset allocation and forward portfolio income yield 3-4 Performance and risk statistics 5-6 Performance of financial markets P a g e

3 Asset allocation and forward portfolio income yield Plexus Wealth BCI Conservative Fund Exposure to Domestic Bonds and Domestic Property decreased slightly in favour of mainly Domestic Cash. Plexus Wealth BCI Balanced Fund Exposure to Domestic Bonds and Domestic Property decreased slightly in favour of mainly Domestic Equities and Domestic Cash. 3 P a g e

4 Plexus Wealth BCI Property Fund Domestic Property exposure increased slightly at the expense of Domestic Cash. Notes: The Plexus Wealth BCI Property Fund is managed by Plexus Wealth KZN. The Plexus Wealth BCI Conservative Fund and the Plexus Wealth BCI Balanced funds are managed by Grindrod Asset Management. The gross forward income yield is the amount of income (before costs and withholding taxes), expressed as a percentage of the current price, which the portfolio is expected to deliver to investors over the next 12 months. The income growth is the expected per annum growth in the income paid to investors over the next three years. These are estimates based upon our expectations of all income (dividends, interest and distributions) to be received by the portfolio for payment to investors, assuming market conditions do not change materially over the 12-month and three-year periods. The gross forward income yield and income growth rate are indicative only and are not guaranteed. These are Grindrod Asset Management estimates. 4 P a g e

5 Performance and risk statistics Source: MoneyMate Note: The Plexus Wealth BCI Property Fund is managed by Plexus Wealth KZN. The Plexus Wealth BCI Conservative Fund and the Plexus Wealth BCI Balanced funds are managed by Grindrod Asset Management. The performance of the Plexus Wealth BCI Funds has proved to be excellent over the past year, both against their respective benchmarks and comparable ASISA sectors. In fact, over the one-year period the Plexus Wealth BCI Conservative Fund and the Plexus Wealth BCI Property Fund both rank second in their respective ASISA sectors, while the Plexus Wealth BCI Balanced Fund ranks thirteenth (out of 126 funds) in its sector. Source: MoneyMate 5 P a g e

6 Note: Performance figures quoted are sourced from MoneyMate for the current period for lump-sum investments including income distributions at NAV to NAV basis and do not take any initial fees into account. Income is reinvested on the ex-dividend date. Actual investment performance may differ based on the initial fees applicable, the actual investment date and the date of reinvestment of income. Source: MoneyMate and I-Net Bridge 6 P a g e

7 Performance of financial markets n/a Equities Global equity markets responded positively to the prospect of further stimulus from central bankers. The S&P 500 Index surged more than 8% during the month and is now back in positive territory for Adding to investor optimism in October was better than expected earnings from a number of large US companies. Although average earnings for the S&P 500 constituents have declined by more than 2% in the third quarter, the drop is far lower than previously forecast by analysts. According to FactSet, of the 340 companies that had reported third-quarter earnings by the end of October, 76% had reported earnings above the mean analyst estimate and 47% had reported sales above the mean analyst estimate. Equity Indices (International) 1 Month 3 Months 1 Year MSCI World ($) 7.8% -3.4% -0.1% MSCI Emerging Markets ($) 7.0% -6.0% -16.6% Dow Jones Industrial 8.5% -0.2% 1.6% S&P % -1.2% 3.0% Nasdaq 9.4% -1.5% 9.1% London FTSE % -5.0% -2.8% German Dax 12.3% -4.1% 16.3% French CAC 9.9% -3.6% 15.7% Japanese Nikkei 9.8% -7.3% 16.3% Hong Kong Hang Seng 8.6% -8.1% -5.7% 7 P a g e

8 South Africa s equity market followed global markets higher, with the large, dual-listed industrials leading the way. A recovery in commodity prices helped the Resources sector claw back some of September s steep losses, but the sector is still down more than 17% in SABMiller surged another 8.8% as AB InBev upped its offer to 44/share. SABMiller s share price has rallied by more than 35% since the first announcement by AB InBev in September. Although the SA equity market looks expensive on a one year forward PE multiple of 17.2x, stripping out the large dual-listed companies reduces the multiple to just 14.1x. FTSE/JSE Equity Indices (TR) 1 Month 3 Months 1 Year All Share 7.6% 4.8% 11.6% SWIX 7.3% 2.9% 10.7% Financial 6.9% 1.9% 19.4% SA Industrial 8.1% 7.7% 20.7% Resources 5.9% -5.0% -26.0% Mining 5.9% -5.0% -22.7% Gold Mining 11.5% 31.1% 9.9% Top % 5.3% 12.3% Mid-cap 6.3% 1.8% 7.4% Small Cap 5.2% 1.8% 8.9% Fixed Income Despite the prospect of further stimulus from policymakers, bond-market investors focused on the possibility that the Fed would raise interest rates at its next policy meeting in December. As a result, global bond yields rose in October, with the US 10-year Treasury yield rising to 2.15% from 2.06% at the end of September. Fixed Interest Indices (International) JP Morgan Global Government Bond Index ($) Bloomberg Global Developed Sovereign Bond Index ($) Bloomberg Local Emerging Market Sovereign Bond Index ($) 1 Month 3 Months 1 Year -0.2% 1.3% -2.4% -0.2% 1.3% -2.7% 2.4% -0.1% -2.7% Bond yields in South Africa fell by more than 10 basis points during October as investor sentiment towards riskier assets like emerging-market debt and equities improved and the rand moved sideways against the US dollar. 8 P a g e

9 Fixed Interest Indices (Domestic) 1 Month 3 Months 1 Year STEFI Composite Index 0.5% 1.6% 6.4% BEASSA All Bond Index (ALBI) 1.3% 1.4% 4.9% Barclays Inflation-Linked Bond Index 2.0% 0.9% 5.6% Listed Property Global listed property markets ignored what was happening to bond yields and instead took their cue from the recovery in equity markets, with the GPR 250 REIT Index soaring 5.8% in US dollars during October. Yields on listed property companies in most geographies are significantly higher than bond yields and continue to offer investors an attractive entry yield into the asset class. South Africa s listed property sector gained a further 2.1% in October on the back of lower domestic bond yields and improving investor sentiment. A number of smaller listed property companies outperformed their larger peers. Both Delta and Rebosis produced distribution growth in line or slightly above expectations and are expected to grow distributions in excess of inflation over the medium-term. At the time of their announcements, both companies were trading on forward income yields in excess of 11% and at substantial discounts to net asset value in Delta s case the discount to net asset value exceeded 15%. This is in stark contrast to property companies like Resilient and Hyprop that trade at substantial premiums to net asset value and at forward income yields of just 3.8% and 4.9% respectively. Listed Property Indices 1 Month 3 Months 1 Year GPR 250 REIT Index (USD) 5.8% 2.1% 4.7% FTSE/JSE SA Listed Property Index (ZAR) 2.1% 3.1% 20.2% 9 P a g e

10 Currencies The US dollar gained against the euro and Japanese yen, but lost some ground against the British pound during October. Despite the continuation of poor economic data releases in South Africa, the increased appetite for riskier assets during October lent support to the rand. It was flat against the US dollar, gained against the euro and lost some ground against the stronger British pound. Currencies (Domestic) 1 Month 3 Months 1 Year ZAR/USD 0.2% -8.3% -20.1% ZAR/EUR 1.7% -8.6% -9.2% ZAR/GBP -1.7% -7.2% -17.2% 10 P a g e

11 Commodities Commodity prices recovered during October as platinum gained 8.7% to trade at $985/oz. The gold price was 2.4% stronger at $ /oz, while silver and palladium gained 7.2% and 2.4% respectively. Copper gained 0.8%. Aluminium plummeted by 7.3%. Lead gained 1.5% and zinc 1.0%, while spot iron ore lost 11.5%. Brent Crude Oil gained 2.1% over the month, to trade at $49.56/per barrel. OPEC reported that oil production reached a three-year high. Commodities (International) 1 Month 3 Months 1 Year RJ CRB Index ($) 1.0% -3.4% -28.1% Brent Crude Futures ($) 2.5% -5.1% -42.3% Gold ($) 2.4% 4.2% -2.7% London Metals Exchange Index ($) -2.3% -5.0% -25.8% 11 P a g e

12 Grindrod Asset Management DISCLAIMER: this report has been compiled by Grindrod Asset Management (Pty) Ltd ( GrAM ), a wholly owned subsidiary of Grindrod Asset Management Holdings (Pty) Ltd. It is confidential and presented as a general information service to the addressee only and therefore should not be considered to be investment advice. Accordingly, it contains no recommendations (whether express or implied), guidance, or proposal that any particular security is appropriate to the investment objectives, financial situation or particular needs of the addressee. Investors are encouraged to obtain their own independent advice prior to participating in any investment. Conflicts of interest may exist with any one or more of the securities recommended in the report, which include situations where the author/s of the report or a member of his/her family owns a direct interest in securities issued by a company mentioned, an employee of GrAM acts as a director of a company mentioned in the presentation, GrAM owns securities in a company mentioned in the report, or GrAM receives compensation for providing financial services to a company mentioned in the presentation. This report shall not be reproduced in whole or in part, without GrAM s permission. The information contained herein has been obtained from sources which, and persons whom, we believe to be reliable but is not guaranteed for accuracy, completeness or otherwise. Any opinions expressed are subject to change without notice. While care has been taken in the preparation of the information contained in the report, GrAM will not be liable for any loss or damage of any nature arising from this report, or incurred as a result of acting on the contents thereof. Grindrod Asset Management (Pty) Ltd is an Authorised Financial Services Provider (License 29834). 12 P a g e