NAV on 2021/09/17
|NAV on 2021/09/16
|52 week high on 2021/04/16
|52 week low on 2020/10/29
|Total Expense Ratio on 2021/06/30
|Total Expense Ratio (performance fee) on 2021/06/30
Prime Collective Investment Schemes
Average of the Worldwide - Multi Asset - Flexible category over a rolling 2-year period
Autus Fund Managers
Autus Prime Worldwide Flexible comment - Sep 19
It is increasingly difficult to find “green shoots” of hope when surveying the current South African economic landscape. The economy rebounded by 3.1% in 2Q2019 after the -3.1% recorded in 1Q2019. The mining and finance sectors contributed positively while manufacturing and trade detracted from economic growth in the quarter. For 2019 GDP growth of 0.6% is projected. Recent inflation updates and expectations show that inflation is at or near the midpoint of the 3%-6% target range despite fuel prices having risen 14.5% year-to-date and administered prices being hiked. Headline inflation of 4.2% is forecast for 2019. At their July meeting, the SARB elected to lower the bank rate by 0.25% to 6.5% while the prime rate was lowered to 10%. Effectively, the SARB returned to the SA consumer what it took away in November 2018. Business confidence (SA Chamber of Commerce and Industry Index) continued to drop in August to levels not seen in 34 years. The NHI Bill was released, setting out the architecture for an NHI fund. This has raised questions over the future of private healthcare and the cost and funding implications on government revenue. Prevailing policy uncertainty, the Eskom debt burden, an increasing budget deficit, and worsening debt-to-GDP ratio make a Moody’s rating downgrade ever more likely in the foreseeable future.
Credit must be given to Finance Minister Mboweni for publishing a paper offering a detailed examination of the structural reforms needed to reverse the downward trend in South Africa’s growth potential and competitiveness. Sadly, it was met with much resistance from alliance partners and some members in the ruling party. We hope that consensus could be reached sooner rather than later by all major role-players on implementing much needed economic and job growth initiatives as a matter of urgency.
Internationally, two interest rate cuts of 25 basis points each were announced by the United States Federal Reserve. Further import tariffs on Chinese goods were extended by the Trump administration until after the end-of-year festive season as trade negotiations between the world’s two largest economies continue with no clear solution in sight. The United States Treasury bond yield curve inverted at the two-year and ten-year maturities which caused some investors to speculate that a recession could be looming. The last time the yield curve inverted at these maturities was in 2007. In July, Boris Johnson was elected as the new Prime Minister of the United Kingdom. Johnson promised to deliver on the withdrawal of the United Kingdom from the European Union even if it comes at the cost of having no trade agreement (a so-called Hard Brexit). Early indications are that Johnson will struggle to win the necessary parliamentary support to deliver on his promise (as was the case with his predecessor).
Uncertain market conditions have forced the fund to remain as low as only 12% in domestic equities. We remain positive on global equities and have a 20% exposure via the Autus Global Equity Feeder Fund which has returned 7.15% during the quarter. We have also upped the Property exposure to 10% as we feel that this is a sector that might offer value. The fund had a return of 0.76% for the quarter. New additions to the fund are the newly listed Prosus which is a spinoff out of Naspers. Prosus is the biggest IT company listed on the Euronext Amsterdam Stock Exchange. Investec was also bought. Profit was taken on companies like BHP, Richemont, and Standard Bank. The fund remains very high in cash. We keep the cash ready for any opportunity that could arise in this upside-down world.
The portfolio may invest in global and local equity securities, government, corporate and inflation-linked bonds, debentures, property shares, preference shares, money market instruments and assets in liquid form. The manager may invest in unlisted investments from time to time, as well as in participatory interests in other collective investment schemes which are consistent with the portfolio's investment policy. Where such schemes are operated outside South Africa, they will only be included if the relevant regulatory environment provides investor protection at least equal to that prevalent in South Africa.