What is the fund’s objective? Strategic Income aims to achieve a higher return than a traditional money market or pure income fund.
What does the fund invest in? Strategic Income can invest in a wide variety of assets, such as cash, government and corporate bonds, inflation-linked bonds and listed property, both in South Africa and internationally. As great care is taken to protect the fund against loss, Strategic Income does not invest in ordinary shares and its combined exposure to listed property (typically max. 10%), preference shares (typically max. 10%), international assets (typically max. 10%) and hybrid instruments (typically max. 5%) would generally not exceed 25% of the fund. The fund has a flexible mandate with no prescribed maturity or duration limits for its investments. The fund is mandated to use derivative instruments for efficient portfolio management purposes. Important portfolio characteristics and risks: Strategic Income is tactically managed to secure an attractive return, while protecting capital. Its investments are carefully researched by a large and experienced investment team and subjected to a strict risk management process. The fund is actively positioned to balance long-term strategic positions with shorter-term tactical opportunities to achieve the best possible income. While the fund is managed in a conservative and defensive manner, there are no guarantees it will always outperform cash over short periods of time. Capital losses are possible, especially in the case of negative credit events affecting underlying holdings. How long should investors remain invested? The recommended investment term is 12-months and longer. The fund’s exposure to growth assets like listed property and preference shares will cause price fluctuations from day to day, making it unsuitable as an alternative to a money market fund over very short investment horizons (12- months and shorter). Note that the fund is also less likely to outperform money market funds in a rising interest rate environment. Given its limited exposure to growth assets, the fund is not suited for investment terms of longer than five years. Who should consider investing in the fund? Investors who are:
To invest in Coronation Fund, please contact Kevin or Ray, email: invest@daberistic.com tel no: (011 658-1333) Source: Coronation
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Yesterday (Happy International Women's Day!) I was fortunate to visit Dodge & Cox in San Francisco, US. Kevin Johnson, an experienced portfolio manager at Dodge & Cox, was kind in spending over an hour with me, for me to understand more about the firm, its operations and investment outlook. Dodge & Cox is situated in the Financial District of San Francisco, occupying 4 floors in this very impressive skyscraper on 555 California Street. After the guest registration process at the lobby, I was told to take a lift to the 40th floor. When the elevator door opened, I walked onto think carpet, with the gold plated Dodge & Cox signage in front of me. I knew I was at the right place. The office has stunning views of the San Francisco Bay area. The tall building in the second picture is Transamerica Pyramid, 260m high. Kevin Johnson came and welcomed me, took me to the boardroom with stunning views of San Francisco. I decided to sit with my back facing the view/window, so I could better focus on my discussions with Kevin. Kevin Johnson is well versed in the investment markets, with 28 years of experience at the firm. I gave him a background of what Daberistic does, our wealth management services to our clients, and how Dodge & Cox funds fit into our solutions to our clients. Kevin then gave me a presentation booklet on Dodge & Cox UCITS. I am not familiar with the term UCITS, so afterwards I googled it. UCITS stands for “Undertakings for Collective Investment in Transferable Securities". In essence mutual funds, or unit trusts as known in South Africa. Dodge & Cox was founded in 1930 in San Francisco. It prides itself in having a stable and well-qualified team of investment professionals, most of whom have spent their entire careers at Dodge & Cox. Ownership of Dodge & Cox is limited to active employees of the firm. Currently there are 75 shareholders and 271 total employees. It is a mature fund management business. Kevin emphasised the point that Dodge & Cox is independent, no absentee ownership, no parent company to report to, so not forced to do anything. This is a great contrast to Merrill Lynch, which is owned by Bank of America. Dodge & Cox is solely in the business of investing clients' assets. Apart from the San Francisco office, it only has one small client service office in London. So all its staff are based in the single office in San Francisco. It offers a focused range of strategies (I tend to like fund managers with a small, focused range): US equities Non-US equities Global equities: combination of the above two US Fixed Income Global Fixed Income US Balanced (combining equities and fixed income) Active vs Passive This debate continues to rage on. Kevin and Dodge & Cox are undoubtedly in the Active Managers camp. His comments? Active managers have been overly criticised for high fees, the focus on (comparing to) average active managers return is a mistake. Dodge & Cox wrote an article on the characteristics of good active managers. These include: 1. Low turnover 2. Experienced 3. High active share. Passive is really a Momentum strategy, buying more on the way up. He used the dotcom bubble as an example: in 1998 the tech sector accounted for 45% of S&P, and index trackers would continue buying more of tech companies as their weightings in the index rose. Only to see the dotcom bubble burst until 2002. What is important is to focus on performance after fees, he comments. I 100% agree with this point. Dodge & Cox is a value-driven fund manager. Value as a style has fallen out of favour with investors over last few years, as the bull market continues to rise. Dodge & Cox continues to stick to what it has done over last 88 years, without wavering. Value Defined It is always good to get under the skin of a manger to understand better what they mean. Kevin defines the firm's Value Investing as "what you thing it's going to be worth in the future. It can be strictly metric based, such as PE ratio. It can also be valuation relative. You would want to avoid something with very high premium built in the price, as it may not be sustainable." So Dodge & Cox sees value in a slightly different way to Warren Buffet. It uses four investment hypotheses: Above Average Growth, Compounders, Cyclical or Asset Play, Deep Value or Turnaround. Warren Buffett's style is probably more the first two hypotheses. Risk Management Over the years I have learnt to appreciate that the best fund managers are also the best risk managers. Dodge & Cox has a systematic way of analysing risks, under the six headings of Operational, Macroeconomic, Commodity, Financial, Technological and Political/Legal Risks. These are used to assess what will cause the future outcomes to disappoint. Investment process Dodge & Cox has a tried and test investment process, run by a very experienced team. I posted some very specific questions to Kevin, his comments are as follows: Schroders as a value manager We as a manager do not worry about what other fund managers do. My impression is they have an excellent reputation, has value orientation. It may have lots of funds. On the question of the use of the word Recovery in Schroders global Recovery Fund: "There can be an element of marketing. This might define value in a more narrow way." Coca-Cola "it is a good business, not a lot of growth, highly priced. We don't own any Coca-Cola stock. Maybe when its PE is 13 it becomes interesting to us." Amazon "A remarkable company, high valuation makes no sense to us. However what it does influences our thinking on other retailers. Retailers like Sears and JC Penny have been in decline for years. Macy's also struggling, not to the same extent. Walmart and Target have done better in response to the changing business environment, the online/offline mix strategy is a good one." Its AWS (Amazon Web Services) also influences our thinking on other tech companies like Microsoft." "of the FANGs, we only own Google" Dell Dell just came out with its update, showing 9% turnover growth and doubling operational losses, so I posted to Kevin. "Dell went largely private, had a series of corporate actions over last 2 1/2 years. Laptops have low margin, the profitable part is server/other services." Portfolio diversification As a wealth manager I am very sceptical of funds with 20% weighting in one stock (Naspers), as I question their risk management and diversification. "We do not have more than 5% of portfolio in one holding. In our Global Stock Fund, we probably will not exceed 3%." Its original (US) Stock Fund has an enviable track record of annualised 9.55% return over 20 years, outperforming S&P500. Over 10 years a respectable 7.71% after fees. The Global Stock Fund, which South African investors can access via Glacier Global Stock Feeder Fund, has done annualised 13.26% in USD over last 5 years. The time was just too short, if there is an opportunity I would come back again. At the end of the meeting I asked Kevin to take a photo together. He agreed as a gentleman.
Discovery Balanced Fund is a flagship fund offered by Discovery Invest. It is only available on the Discovery Invest platform. It is managed by Chris Freund of Investec Asset Management, a very experienced and successful portfolio manager. He manages investments using an earnings revision approach. Discovery Balanced Fund has attracted a lot of inflows, in fact the fastest growing balanced fund in South Africa, thanks to clients and advisors' support, benefiting from the integration and unique features of a range of Discovery Invest products. Discovery Balanced has been a consistent top-quartile performer in the high-equity balanced fund sector, with the (annualised) performances figures as follows: 10 years: 10.14% 5 years: 11.52% 3 years: 8.05% 1 year: 11.34% This fund has a high cost, with a Total Investment Charge (TIC) of 2.12%. This makes it one of the most expensive balanced funds to invest in. I question this high fund management fee, even given its good performance figures. Were it not for various integration and fee reduction structures offered by Discovery Invest for investing in a Discovery fund, this will erode net returns to investors over the long term. Discovery Balanced Fund is suitable for general long-term investment. Being Regulation 28 compliant, it is suitable for use in a retirement product.Below is the link to download Discovery Balanced Fund's fund fact sheet as at end December 2017. To invest in Coronation Fund, please contact Kevin or Ray, email: invest@daberistic.com tel no: (011 658-1333) Source: Kevin Yeh (LInkedin) Firstly, let me dedicate this report to my Lord and Saviour Jesus Christ, may honour and glory be to Him forever and ever! As a Financial Advisor with actuarial qualifications, I am particularly fascinated by investments. I have spent lots of time over the last 21 years studying the subject of investment. I have learnt and analysed all kinds of financial instruments, including shares, unit trusts, CFDs, futures, warrants and ETFs. Over the years the investment markets have taught me a lot of things. It has taught me to be humble. It has taught me to be a ready student, to continue to learn, think and reflect. In the past I have written about share analysis, technical analysis, and general investment advice. This is the first time I write and share a comprehensive report on unit trusts. Over the years I have appreciated the way good unit trusts, or Collective Investment Schemes, has helped me and my clients grow my wealth. They have provided many investors an excellent way of investing in a diversified portfolio of assets, that over the long term have demonstrated significant real returns. This first comprehensive report on unit trusts focuses on high-growth unit trusts. I share this report with my fellow financial advisors in the hope of helping you help your clients make better, independent, informed investment decisions. If you like this report and think this report has helped you, please like it on LinkedIn and share it with financial advisors. Please also comment on this report, so that I can know whether I am on the right track, and how I can continue to refine my investment thinking. Click the link below to download the report.
What is the fund’s objective? The Fund aims to outperform global stock markets over the long term, without taking on greater risk. Its benchmark is the FTSE World Index, including income. How Allan Gray aims to achieve the Fund’s objective? The Fund invests only in the Orbis Global Equity Fund. The Orbis Global Equity Fund is managed to remain fully invested in selected global equities. Orbis uses in-house research to identify companies around the world whose shares can be purchased for less than Orbis’ assessment of their long-term intrinsic value. This long-term perspective enables Orbis to buy shares which are shunned by the stock market because of their unexciting or poor short-term prospects, but which are relatively attractively priced if one looks to the long term. This is the same approach as that used by Allan Gray to invest in South African equities, except that Orbis is able to choose from many more shares, listed internationally. Suitable for those investors who • Seek exposure to diversified international equities to provide long-term capital • growth • Wish to invest in international assets without having to personally expatriate rands • Are comfortable with global stock market and currency fluctuation and risk of • capital loss • Typically have an investment horizon of more than five years • Wish to use the Fund as a fully invested global equity ‘building block’ in a • diversified multi-asset class portfolio To invest in Coronation Fund, please contact Kevin or Ray, email: invest@daberistic.com tel no: (011 658-1333) Source: Allan Gray An ETF, or exchange-traded fund, is a marketable security that tracks an index, a commodity, bonds, or a basket of assets like an index fund. Unlike unit trusts, an ETF trades like a common stock on a stock exchange. ETFs experience price changes throughout the day as they are bought and sold. ETFs typically have higher daily liquidity and lower fees than unit trusts, making them an attractive alternative for individual investors.
Because it trades like a stock, an ETF does not have its net asset value (NAV) calculated once at the end of every day like a unit trust does. ETF investors are entitled to a proportion of the profits, such as earned interest or dividends paid, and they may get a residual value in case the fund is liquidated. The ownership of the fund can easily be bought, sold or transferred in much the same was as shares of stock, since ETF shares are traded on public stock exchanges. There are now over 5,000 ETFs worldwide. In South Africa there are 57 ETFs listed on the JSE. The ETFs available in South Africa can be classified into seven categories: South African Equity International Equity Bond Commodity Money Market Multi-Asset Class Property Equity You can buy ETFs listed on a stock exchange, such as JSE, through a reputable stockbroker or an ETF platform such as etfsa.co.za. Your return from owning ETFs comes from two sources: dividends or interest paid to you, and increase in share price (capital gains). Dividends received are subject to 20% Dividend Withholding Tax; capital gains are subject to Capital Gains Tax. ETF share price can go up or down. When share price goes up, you make a profit on paper. When share price goes down, you make a loss on paper. Before you invest in ETFs, you must do your research. You should identify the ETFs you would like to invest in, read the factsheets (Minimum Disclosure Documents), have a good understanding of their underlying assets, prospects and financials. After you have bought an ETF, you need to continue to monitor its performance, changes to underlying assets and future prospects, to determine whether it is appropriate to stay invested. Working with an advisor specialising in ETFs will add value to your ETF investing process. Having a good understanding of technical analysis may help buying ETFs at better prices. ETF investing is a long-term activity. It is NOT buying and selling ETF shares regularly in the hope of making quick profits. A word of advice: I consider the International Equity, Commodity and Property Equity ETFs to be the most interesting for investors to consider as part of their diversified portfolio. But remember, don’t base your investment decisions on looking at past performance figures only. You need to be forward looking, thinking about what is likely to do better going forward. What is the fund’s objective? The Global Emerging Markets Fund aims to give investors access to the best opportunities in emerging equity markets. The fund actively seeks out undervalued shares to maximise long-term growth. Our intent is to outperform the emerging equity benchmark over all periods of five years and longer What does the fund invest in? The fund invests in the shares of companies which are either based in emerging countries, or earn a significant part of their revenue from emerging economies. It will be fully invested in shares at all times. The fund is mandated to use derivative instruments for efficient portfolio management purposes. Important portfolio characteristics and risks Global Emerging Markets will only invest in shares we view as being attractively valued and which may offer superior long-term investment growth. The fund’s share selection is the result of rigorous international research conducted by Coronation’s investment team. While we have a disciplined approach to reducing risk, shares can be volatile investments and there is a meaningful risk of capital loss over the short term. Emerging markets are generally viewed as more risky than developed markets. Global currency movements may intensify investment gains or declines. If you would like to invest in Coronation Fund, please contact Kevin or Thato, email: invest@daberistic.com tel no: (011 658-1333) Source: Coronation |
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