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 The Sharenet Daily 
Tuesday, 08 April 2014 - 20:00
Top News
SA Business
Company News
Company Results
World Markets (Spot Prices)
JSE Today
JSE Trading Statistics
Major Moves
Index Summary
Latest Consensus Changes / Results Expected
Recent Dividends / Ex Div
Upcoming AGMs
Stock Exchange News Service (SENS)

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Seed Weekly - Fund Manager Warning Signs

In last week’s newsletter, Multi Management Unveiled, we discussed the benefits and drawbacks of multi managers in helping investors achieve their investment objectives. The article also alluded to other benefits of being invested into multi managed funds.

Finding the correct underlying managers and developing the optimal strategy for a multi managed fund is only the initial responsibility of a multi manager. After an underlying fund has been included into a multi managed fund, the multi manager needs to monitor, inter alia, the following aspects:

• Underlying fund performance
• Change in portfolio manager
• Change in assets under management (AUM)
• Style drift

    Underlying Fund Performance

“Past performance is no indication of future returns” is well know and used phrase in the investment world. A portfolio manager might have outperformed his/her investment objective in the past, but will this continue going forward? A multi manager needs to monitor the performance of the fund and check if the performance deviates from expectations.

A multi manager shouldn’t only be concerned if the fund underperforms, but also if it outperforms when it shouldn’t. An example is when a conservative manager outperforms in a bull market – the manager may be taking on unnecessary risks.

    Change in Portfolio Manager

The portfolio manager and investment team tend to be the most important part of a fund’s performance. When a portfolio manager leaves, the multi manager needs to have an opinion on the manager that’s taking over and the depth and expertise of the remaining investment team.

The graph below shows the drop in AUM of a fund after a change in portfolio manager was announced at the end of 2013. The investors (including multi managed funds) clearly didn’t feel comfortable with the new arrangements and disinvested.

The graph below shows a fund that had two manager changes, one in September 2009 and the other in October 2012. On both occasions the investors were content with the new managers coming on board and didn’t see the need to disinvest.

At Seed, when there is an unannounced portfolio manager change, the fund is automatically removed from all short lists and only after we are able to meet with the new portfolio manager we will either put the fund back on the short list or disinvest.

    Change in Assets Under Management (AUM)

An asset manager earns most of their income from the investments that they manage. When there is a sudden drop in AUM, it will lead to lower income earned and possibly become a going concern risk. Even if the asset manager is able to stay afloat, their priorities will in all likelihood change to focus more on generating new business (i.e. spend less time managing existing funds).

Boutiques and medium sized managers that have a few pension/institutional clients dominating their AUM are most at risk. There is a local asset manager that lost close to 90% of their AUM when institutional clients pulled their investments.

    Style Drift

One of a multi manager’s goals is to blend uncorrelated investment styles in order to reduce the volatility of the fund and increase returns over the long term. When a manager’s style drifts, the underlying funds can become correlated and the benefit of diversification reduced.

The graph below shows how a manager’s investment style can change over time. The fund started off investing into Small cap value companies and over the years moved over to Mid/Large cap growth companies.

The benefit of a multi managed fund is peace of mind for investors. Multi managers continuously monitor the investments in the fund (across a variety of metrics) and keep an eye out for new and improved strategies/managers to incorporate.

Kind regards,

Gerbrandt Kruger

021 914 4966

Tue, 08 Apr 2014
Top News
South African stocks rebounded on Tuesday after stumbling in the previous session, led by iron ore producers Kumba and Assore, which were lifted by a spike in futures prices triggered by stockpile jitters.  Full story

South Africa's central bank expects volatility in the rand currency to continue although it does not believe intervening in the market would be effective, Reserve Bank Governor Gill Marcus said on Tuesday.  Full story
U.S. Secretary of State John Kerry accused Russian agents and special forces on Tuesday of stirring separatist unrest in eastern Ukraine, saying Moscow could be trying to prepare for military action as it had in Crimea.  Full story
Israeli and Palestinian negotiators ended another U.S.-mediated session on Tuesday with no sign of a breakthrough in efforts to save peace talks from collapse, but an Israeli official said they had agreed to meet again.  Full story
An Australian ship which picked up possible "pings" from the black box recorders of a missing Malaysia Airlines jetliner has been unable to detect any further signals and time is running out to narrow the massive search, officials said on Tuesday.  Full story
The dollar and euro fell sharply against the yen on Tuesday as hopes for additional stimulus out of Japan faded, while bargain- hunting. . .  Full story
Gold rose 1 percent on Tuesday on a sharply lower dollar and as renewed tensions between the United States and Russia over Ukraine. . .  Full story
Britain's blue chip share index hit a two-week low on Tuesday, with Sports Direct leading losses after a share sale by founder Mike. . .  Full story
European shares fell for a second day on Tuesday as investors sold out of some of the year's top performing regional indexes and. . .  Full story

U.S. stocks rose on Tuesday, rebounding after three days of declines, as investors bought beaten-down shares of social media and Internet companies.. . .  Full story
U.S. stocks opened mostly flat on Tuesday, with the S&P 500 stabilizing after a three-session selloff as investors looked ahead to the start. . .  Full story
European shares fell for a second day on Tuesday, with building materials group Saint-Gobain among the worst hit, as investors sold out of. . .  Full story
Britain's top equity index fell on Tuesday, with sportswear retailer Sports Direct sliding sharply after its founder sold a chunk of shares. . .  Full story
SA Business
As a strike by South African platinum miners enters its eleventh week, the likelihood that employers will bow to demands for. . .  Full story
Massmart, South Africa's No.4 retailer by market value, plans to enter oil-rich Angola with two stores by 2015, a senior executive. . .  Full story
Business confidence in South Africa edged up to 92.7 in March from 91.9 in February, a survey by the South African. . .  Full story
South Africa's rand hit its strongest level against the dollar this year in Tuesday's early trading session as positive momentum continued. . .  Full story

South Africa's central bank expects the rand to remain volatile although it is unlikely to intervene in the market to try and stabilise. . .  Full story
South Africa's rand extended gains to over one percent against the dollar on Tuesday, tracking a firmer euro and as emerging. . .  Full story
Angola's Banco BIC, backed by the billionaire daughter of the country's president and a Portuguese cork tycoon, plans to ramp up its branch. . .  Full story
The International Monetary Fund on Tuesday predicted the global recovery would strengthen this year and next as output in richer nations picked up,. . .  Full story

German engineering firms should be more aggressive in selling equipment to fast-growing markets in Africa rather than leaving the field to Chinese, U.S., Italian and French rivals, trade group VDMA said.. . .  Full story
South Africa's largest insurer Sanlam plans to conclude three or four acquisitions in other African countries this year as it chases faster-growing markets, a senior official said.. . .  Full story
The world's financial leaders are likely to discuss possible risks to Europe's economy from the crisis in Ukraine, but there are no plans to mention it in the final document from. . .  Full story
World Markets (Spot Prices)
NameTimeRPMove% Move
JSE Overall17:0048069.53211.580.44%
JSE Top 4017:0043230.33210.280.49%
JSE Gold17:001498.2813.460.91%
JSE Financial17:0035732.75119.900.34%
JSE Industrial17:0061711.01304.000.50%
JSE Indust 2517:0054374.80278.700.52%
JSE Resource17:0056539.79264.760.47%
DJ Futures19:5016220.00-45.40-0.28%
DJ Ind19:5416283.6037.730.23%
SP 50019:541853.738.690.47%
FTSE 10017:356590.69-32.15-0.49%
All Ords08:395409.20-6.90-0.13%
NZSE 5007:485031.56-44.28-0.87%
NameTimeRPMove% Move
Gold $19:591309.4312.510.96%
Gold R19:5913701.3364.500.47%
Gold R/kg19:544396055980.14%
Silver $19:5920.0280.16700.84%
Platinum $19:591440.0017.251.21%
Palladium $19:59775.0011.501.51%
Brent Crude19:50106.99.270.25%
Rand / Dollar19:5910.4639-0.0508-0.48%
Rand / Pound19:5517.47270.03430.20%
Rand / Euro19:5514.4200-0.0345-0.24%
Rand / NZD19:599.07930.02820.31%
Rand / AUD19:559.78450.03320.34%
Yen / Dollar19:59101.9100-1.1080-1.08%
Euro / Dollar19:590.7248-0.0029-0.40%
Dollar / Euro19:591.37970.00550.40%
Pound / Dollar19:550.5969-0.0049-0.81%

Click here for the Sharenet Spot Price page
The JSE Today

Trading Statistics
* Includes all listed instruments on the JSE
Major Moves Up
SharenameSaleMove% MoveVolume
1 SABVEST-N  265035015.22.%2775
2 DIAMONDCP  1041314.29.%110
3 CULLINAN  3304013.79.%19770
4 POYNTING  449378.98.%351604
5 GOLIATH  211168.21.%12840
6 TRUSTCO  12697.69.%1127450
7 HUGE  145107.41.%11521
8 TOWER  830455.73.%557349
9 SOVFOOD  575305.50.%14004
10 CBH  300124.17.%285326
11 TRUWTHS  80253184.13.%2060532
12 TFG  108004164.01.%1174668
13 DIPULA-B  799293.77.%6000
14 VODACOM  138754913.67.%2361216
15 ASSORE  4201414443.56.%90645
16 KUMBAIO  3920013303.51.%890840
17 TIMES  2149693.32.%16
18 ILLOVO  2770782.90.%878014
19 NAMPAK  37501002.74.%2481890
20 PSG  94502502.72.%71763

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Major Moves Down
SharenameSaleMove% MoveVolume
1 METMAR  120-15-11.11.%75761
2 BUILDMX  240-20-7.69.%390575
3 INFRASORS  111-9-7.50.%15000
4 AQUARIUS  560-45-7.44.%531274
5 ATLATSA  440-35-7.37.%33977
6 AMECOR  300-20-6.25.%6350
7 TREMATON  340-20-5.56.%755
8 NEPI  8415-395-4.48.%255469
9 DRDGOLD  352-14-3.83.%1255258
10 MONDIPLCP  17711-678-3.69.%1173891
11 MONDILTDP  17878-617-3.34.%587634
12 NETCARE  2360-80-3.28.%5589684
13 RMIH  2851-80-2.73.%1545463
14 PALLINGHT  324-9-2.70.%73072
15 SIBANYE  2420-66-2.65.%2342031
16 EQSTRA  680-18-2.58.%191807
17 ROLFES  445-11-2.41.%62478
18 BELL  1799-41-2.23.%14929
19 BEE-SASOL  44500-1000-2.20.%426
20 FINBOND  322-6-1.83.%41835

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New Highs
SharenameSaleHighMove% MoveVolume
1 SABVEST-N  2650265035015.22.%2775
2 POYNTING  449475378.98.%351604
3 TRUSTCO  12613297.69.%1127450
4 VODACOM  13875138994913.67.%2361216
5 STANBANK  14370143703442.45.%5114675
6 FIRSTRAND  38753875661.73.%24478997
7 B-AFRICA  15528155702281.49.%1697251
8 RMBH  50285064380.76.%2088064
9 PETMIN  2552590.215748
10 RBPLAT  66636992-37-0.55.%402266

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New Lows
SharenameSaleLowMove% MoveVolume
1 ETFPLD  82008130-76-0.92.%1141909

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Index Summary
Index NameRPMove% Move
Top 4043,230.33210.280.49%
Mid Cap61,428.79156.470.26%
Small Cap51,520.40-50.84-0.10%
Resource 2056,539.79264.760.47%
Industrial 2554,374.80278.700.52%
Financial 1513,735.0751.130.37%
Financial & Ind. 3058,360.33281.850.49%
All Share48,069.53211.580.44%
Oil & Gas 43,472.01186.160.43%
Mining 33,833.95138.350.41%
Gold Mining1,498.2813.460.91%
Platinum Mining49.74-.20-0.40%
GENERAL MINING9,785.7941.890.43%
Oil & Gas Producers 23,374.10100.100.43%
Basic Materials 29,826.1856.680.19%
Chemicals 24,177.05-37.40-0.15%
Forestry & Paper 30,145.87-1007.62-3.23%
Industrial Metals 21,341.76605.682.92%
Industrials 44,128.63169.770.39%
General Industrials 139.94.760.55%
Consumer Goods 57,358.46264.360.46%
Automobiles & Parts 9,445.064.530.05%
Household Goods360.7210.32%
Health Care 76,046.74-797.42-1.04%
Index NameRPMove% Move
Food Producers 68,391.50243.460.36%
Personal Goods 999.76-8.39-0.83%
Consumer Services 10,833.08170.981.60%
General Retailers 61,772.84872.551.43%
Travel & Leisure 5,502.34-15.49-0.28%
Media 232.485.042.22%
Support Services 2,645.1115.040.57%
Telecommunications 10,383.0742.130.41%
Financials 35,732.75119.900.34%
Banks 63,057.811086.971.75%
Non-life Insurance 49,033.2730.630.06%
Life Insurance 33,838.90-326.02-0.95%
General Financial 3,592.73-2.67-0.07%
Technology 40,083.76-107.61-0.27%
SHARIAH TOP40 4,180.06110.27%
FTSE/JSE SHARIAH ALL4,271.2490.20%
COAL MINING18,640.272241.21%
FTSE JSE Fledgling 6,625.94-17-0.25%
FTSE/JSE Alt X 1,212.4240.33%
RESOURCE 30,876.371270.41%
DIVIDEND PLUS222.0220.90%
FTSE/JSE RAFI 409,697.82350.37%
Capped Top 4022,876.311140.50%
Capped All Share24,335.031080.44%
JSE TABACO 7,590.281712.31%

Click here for the Sharenet Index Summary page
Latest Consensus Changes**
CodeCompany NameStatusUpdated
Results Expected**
ExpectedCompany NameFin. Date
09/04/2014CILFebruary 2014 (Interim)
09/04/2014EFFICIENTFebruary 2014 (Interim)
11/04/2014OANDODecember 2013 (Final)
11/04/2014PHUMELELAJanuary 2014 (Interim)
11/04/2014PURPLEFebruary 2014 (Interim)

Recent Dividends**
Share NameDec-DateLDTPay-DateAmount
ZEDER07/04/1423/04/1405/05/14ZAR 0.0450
ASTRAPAKP04/04/1423/04/1405/05/14ZAR 4.0049
VIVIDEND04/04/1423/04/1405/05/14ZAR 0.2400
NTC PREF01/04/1430/04/1412/05/14ZAR 3.5667
ILRPREF131/03/1416/04/1429/04/14ZAR 12.2033
Ex Div**
Share NameDec-DateLDTPay-DateAmount
BEE-SASOL07/04/1404/04/1414/04/14ZAR 8.0000
SASOL10/03/1404/04/1414/04/14ZAR 8.0000
BIDVEST27/02/1404/04/1414/04/14ZAR 3.7800
EXXARO06/03/1404/04/1414/04/14ZAR 3.1500
STANBANK06/03/1404/04/1414/04/14ZAR 3.0000

Upcoming AGMs**
CodeCompany NameDateStatus
CNDConduit Capital Ltd.09/04/2014Confirmed

Stock Exchange News Service
08/04/201417:45EFFICIENT GROUP LIMITED - Dealings in securities by directors, directors of majo...
08/04/201417:44EFFICIENT GROUP LIMITED - Dealings in securities by directors of major subsidiar...
08/04/201417:43EFFICIENT GROUP LIMITED - Dealings by directors, directors of major subsidiaries...
08/04/201417:42EXXARO RESOURCES LIMITED - Exercise of matching awards and sale in terms of the ...
08/04/201417:40INTU PROPERTIES PLC - Notification of Major Interests
08/04/201417:35EXXARO RESOURCES LIMITED - Acceptance of conditional awards granted in terms of ...
08/04/201417:18JSE LIMITED - Index Change Advice - 20140416 Mas Real Estate Inc Shares In Issue...
08/04/201417:15JSE LIMITED - Index Change Advice - 20140416 Jubilee Platinum Shares In Issue Up...
08/04/201417:15JSE LIMITED - Index Change Advice - B&W Instrumentation and Electrical Deletion
08/04/201417:15FIRSTRAND BANK LIMITED - New Instrument Listing-FRC193-5
08/04/201417:08JSE LIMITED - Index Change Advice - 20140416 Tower Property Fund Shares In Issue...
08/04/201417:05JSE LIMITED - Index Change Advice - African Dawn Capital Shares In Issue Update
08/04/201416:53RCL FOODS LIMITED - Results of special resolution passed in terms of section 60 ...
08/04/201416:44SOAPSTONE INVESTMENT LTD - Convertible bond price adjustment
08/04/201416:24INDWA INVESTMENTS LIMITED - Listing of Tap Issue-INA427
08/04/201416:13MINE RESTORATION INVESTMENTS LTD - Terms announcement
08/04/201415:55ANGLO AMERICAN PLC - Anglo American Share Incentive Plan SIP
08/04/201415:31ATTACQ LIMITED - Dealings in securities by an associate of a director of Attacq
08/04/201415:30HOLDSPORT LIMITED - TRP121: notification of disposal of beneficial interest in s...
08/04/201415:04GRINDROD LIMITED - The Acquisition of Black Economic Empowerment (Bee) Interests...
08/04/201415:00BRIMSTONE INVESTMENT CORPORATION LD - Participation by Brimstone in a BEE consor...
08/04/201414:45NEW EUROPE PROPERTY INVESTMENTS PLC - Results of the Accelerated Book Build
08/04/201414:31FORTRESS INCOME FUND LIMITED - TRP121: Notification of acquisitions of beneficia...
08/04/201414:00ILIAD AFRICA LIMITED - General repurchase of shares
08/04/201412:56THE STANDARD BANK OF SA LTD - The Standard Bank of South Africa Limited Tap Iss...
08/04/201412:17BRIMSTONE INVESTMENT CORPORATION LD - Dealing in Securities by a Director
08/04/201412:06THARISA PLC - Listing of Tharisa and results of the Private Placement
08/04/201411:39PEREGRINE HOLDINGS LIMITED - Trading Update
08/04/201410:41AQUARIUS PLATINUM LIMITED - Newissueannouncement,applicationforquotation ofaddit...
08/04/201410:40AQUARIUS PLATINUM LIMITED - Change of Directors Interest Notice
08/04/201410:32HARMONY GOLD MINING COMPANY LIMITED - Fatality at Harmony's Tshepong Mine
08/04/201410:30DEUTSCHE BANK AG - Wave Listing - TOPDWZ
08/04/201410:15BARLOWORLD LIMITED - Interest Rate Reset-BAW3 and BAW6
08/04/201410:07BARLOWORLD LIMITED - Interest Rate Reset-BAW10
08/04/201410:05AFRICAN DAWN CAPITAL LIMITED - Directors Dealing Pursuant To The Knife Capital A...
08/04/201409:39GRINDROD INDEX TRACKER MAN RF PTY LTD - Listing of 200 000 additional Preftrax s...
08/04/201409:00NEW GOLD ISSUER LIMITED - NGPLD-Additional Listing of 800 000 NewGold Palladium ...
08/04/201408:45NEW EUROPE PROPERTY INVESTMENTS PLC - Accelerated Book Build
08/04/201408:30MIX TELEMATICS LIMITED - TRP121: Notification of a disposal of a beneficial inte...
08/04/201408:15TAWANA RESOURCES NL - Tawana Resources NL (ASX: TAW) Cleansing Statement Issued...
08/04/201408:05INTU PROPERTIES PLC - Notifications of Transactions of Person Connected with a P...
08/04/201408:00TAWANA RESOURCES NL - Successful Capital Raising Completed for Mofe Creek Projec...
08/04/201407:59RBA HOLDINGS LIMITED - Notification in terms of section 122(3) of the Companies ...
08/04/201407:05BRITISH AMERICAN TOBACCO PLC - Transaction in own shares

Click here for more SENS news