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 The Sharenet Daily 
Tuesday, 10 June 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 - Active Share

Active share has emerged as a new metric to assess active managers. The metric focuses on how individual stock weights in a portfolio differ from the weights in a benchmark, providing an enhancement over traditional measures such as tracking error. Simply said, active share is the fund’s percentage that is different from its benchmark. By looking at the active share you can determine if the manager is doing active stock selection or secretly hugging the benchmark.

Active share is calculated by summing the absolute difference between a stocks weight in the portfolio and the index and then halving the value and ranges from 0% (100% overlap with benchmark) to 100% (zero overlap with benchmark).

The chart below shows the stock selection of two funds and the index (benchmark) weight of the stocks.

From the chart we can see that Fund 1 is much more active in stock selection and weighting compared to Fund 2. Fund 2 is an example of closet indexer or benchmark hugger. Practically, Fund 1 has an active share of 60% and Fund 2 has an active share of only 10%.

A closet indexer is an ‘active’ manager that only takes small relative positions when compared to the index that is used as the benchmark. The returns of these funds will, gross of fees, typically be similar to that of the benchmark, but below the benchmark after fees are deducted. These managers tend to shy away from making high conviction investments which would differentiate them too far from the benchmark.

Bank Credit Analyst (BCA) looked at the active share of all equity unit trusts in the US over the last 34 years. The funds were grouped into bands by active share. They discovered that, over time, there has been an increase in funds that are closet indexers.

To get returns different to the index, a fund needs to be positioned differently to the index. The research done by BCA showed funds that outperformed the index also had a high active share.

BCA also took a look at the relation between active share, fund size and outperformance. The chart below shows the relative performance of funds broken up into fund size and active share.

From the chart we can see that small active funds had, on average, the highest outperformance. The chart also interestingly shows that fund size doesn’t have a material impact on relative performance, but that active share is a more valuable measure of whether there will be outperformance. Naturally, as a fund gets larger it becomes more difficult to retain a high active share.

While active share is very useful, it is simply another tool that should be added to an investor's toolbox for use in evaluating investment portfolios (unit trusts, segregated accounts, pension funds, etc). As the research becomes more widespread we expect that more emphasis will be placed on active share, making it more accessible for the average investor. It is currently very difficult for the average investor to calculate active share for a range of local equity managers. The key take out is that funds that are closely aligned to an index will struggle to outperform after costs.

Due to the concentrated nature of the local market we expect that South African funds will have a lower active share when compared to global funds. Globally, active share should be above 80% for a fund to be considered ‘active’, locally we expect it to be above 70%. At Seed, when allocating client investment to an active manager, our preference is for an active share consistently in excess of 75%.

Kind regards,

Gerbrandt Kruger

021 914 4966

Tue, 10 Jun 2014
Top News
A worldwide measure of stocks was little changed on Tuesday, while U.S. Treasury yields touched one-month highs and the euro slipped as the prospect of higher U.S. interest rates begins to take hold in markets.  Full story

Palladium jumped to its highest level in nearly 3-1/2 years on Tuesday, while platinum also rallied after talks on Monday to resolve a five-month strike in top producer South Africa collapsed.  Full story
Pakistan's Taliban insurgents claimed responsibility for an attack on a security academy at Karachi's airport on Tuesday, less than 48 hours after an all-night siege by Taliban gunmen at Pakistan's busiest airport that killed more than 30 people.  Full story
Fifteen crew of a South Korean ferry that sank in April killing more than 300 people, most of them children, went on trial on Tuesday on charges ranging from negligence to homicide, with the shout going up of "murderer" as the captain entered the court.  Full story
An al-Qaeda splinter group in Iraq seized control of the big northern city of Mosul on Tuesday, putting security forces to flight in a spectacular show of strength against the Shi'ite-led Baghdad government.  Full story
European stocks inched up on Tuesday, extending a three-week rally, led by gains in defensive Swiss blue-chips such as pharma group Novartis and food. . .  Full story
Britain's top stock index recovered in late trading on Tuesday to end flat, with a surge in SABMiller on merger talks offset by. . .  Full story
U.S. stocks advanced on Monday, boosted by a number of major acquisition deals, though gains were slight with key indexes continuing to hover. . .  Full story
A worldwide measure of stocks dipped on Tuesday but was within reach of its record high, while U.S. Treasury yields touched one month. . .  Full story

U.S. stocks edged lower on Tuesday, as a lack of buying catalysts was evident with the Dow and S&P 500 just below their. . .  Full story
An all-time low for euro zone money market rates bolstered the region's bond rally and held down the euro on Tuesday, providing clear. . .  Full story
Britain's top share index retreated on Tuesday after coming close to a record high in the previous session, with telecom operator BT Group. . .  Full story
Hong Kong shares finished at their highest in more than five months on Tuesday, tracking strong gains in the mainland after China detailed. . .  Full story
SA Business
South African stocks scaled to record highs on Tuesday for a second straight session but shares of platinum mining firms fell. . .  Full story
Impala Platinum has "exhausted all of its financial means" in its wage offer to South Africa's striking AMCU union, a spokesman. . .  Full story
South Africa is facing a self-inflicted economic slowdown caused mainly by a strike in the country's platinum mines, but a recession. . .  Full story
South Africa's manufacturing output fell by 1.5 percent year-on-year in volume terms in April after a revised 1 percent expansion in. . .  Full story

Platinum producer Lonmin may soon need to raise capital to survive South Africa's longest and costliest mining strike, which has paralysed. . .  Full story
South Africa's quarterly business confidence index was unchanged at 41 index points in the second quarter of the year, indicating the. . .  Full story
The South African rand fell 0.7 percent on Tuesday versus the dollar, lagging emerging peers as a stubborn economic downturn looks set to. . .  Full story
Eni has agreed to buy a 40 percent interest in an exploration permit granting rights to explore an offshore area of. . .  Full story

South Africa's Central Bank Governor Gill Marcus said on Tuesday the domestic economy faced "enormous headwinds", some of which were of the country's own making, including labour issues.. . .  Full story
South Africa's rand eased against the dollar early on Tuesday after Central Bank Governor Gill Marcus said the outlook for emerging markets was fragile due to the end of the "era" of abundant capital flows.. . .  Full story
World Markets (Spot Prices)
NameTimeRPMove% Move
JSE Overall17:0050736.42601.891.20%
JSE Top 4017:0045730.62593.551.31%
JSE Gold17:001412.2821.551.55%
JSE Financial17:0037562.71250.100.67%
JSE Industrial17:0067219.701314.812.00%
JSE Indust 2517:0059574.201269.342.18%
JSE Resource17:0056046.41-45.76-0.08%
DJ Futures19:4216912.00-21.00-0.12%
DJ Ind19:5816928.23-14.87-0.09%
SP 50019:581948.17-3.10-0.16%
FTSE 10017:356873.55-1.45-0.02%
All Ords08:385448.505.000.09%
NZSE 5007:485179.40-7.95-0.15%
NameTimeRPMove% Move
Gold $19:591259.958.000.64%
Gold R19:5913510.66201.381.51%
Gold R/kg19:5843406659431.39%
Silver $19:5919.1700.12000.63%
Platinum $19:591477.9030.602.11%
Palladium $19:59851.6512.451.48%
Brent Crude19:58109.28.670.62%
Rand / Dollar19:5910.72360.09250.87%
Rand / Pound19:5517.92520.08810.49%
Rand / Euro19:5514.51730.06140.42%
Rand / NZD19:599.13040.09801.08%
Rand / AUD19:5510.04450.09810.99%
Yen / Dollar19:59102.3780-0.1540-0.15%
Euro / Dollar19:590.73870.00560.76%
Dollar / Euro19:591.3536-0.0056-0.41%
Pound / Dollar19:550.59690.00200.34%

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 CENRAND  3496924.64.%303
2 CAMAC  75911918.59.%3500
3 SANTOVA  2403014.29.%346265
4 VUNANI  1501511.11.%45816
5 EFFICIENT  3303010.00.%550
6 MMG  910607.06.%18209
7 SABMILLER  6153432545.58.%4147887
8 AFRO-C  430235.54.%770940
9 HARMONY  30601505.15.%431454
10 CADIZ  11054.76.%91223
11 GFIELDS  39841594.16.%1489345
12 NET1UEPS  127005004.10.%6415
13 NASPERSN  12430148014.02.%1591110
14 ASPEN  2934410253.62.%1898132
15 TRADEH  1475503.51.%671480
16 SAPPI  39611323.45.%1754743
17 PINNACLE  1145373.34.%467370
18 TIGBRANDS  309999993.33.%810824
19 TONGAAT  148494583.18.%144829
20 SYCOM  2690803.07.%10796

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Major Moves Down
SharenameSaleMove% MoveVolume
1 ROCKWELL  277-53-16.06.%6373
2 FONEWORX  225-15-6.25.%472023
3 BRIMST-N  1600-100-5.88.%220
4 VPIF  901-49-5.16.%6000
5 RANGOLD  418-22-5.00.%2406
6 ELLIES   380-18-4.52.%428941
7 LITHA  180-8-4.26.%80388
8 TSOGO-SUN  2707-120-4.24.%68018
9 KEATON   245-10-3.92.%720732
10 CONDUIT  151-6-3.82.%18860
11 TRANSCAP  615-23-3.61.%23873
12 BELL  1500-45-2.91.%3960
13 ASCEN_A  475-14-2.86.%7000
14 CASHBIL  13082-385-2.86.%1932
15 SYCR  2620-75-2.78.%7471
16 KAP  395-11-2.71.%56542
17 POYNTING  369-10-2.64.%3576
18 BLACKSTAR  1300-35-2.62.%350
19 HULAMIN  750-19-2.47.%197040
20 ARROW-B  717-18-2.45.%1221129

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New Highs
SharenameSaleHighMove% MoveVolume
1 SABMILLER  615346215232545.58.%4147887
2 ASPEN  293442940210253.62.%1898132
3 TRADEH  14751490503.51.%671480
4 SAPPI  396139631323.45.%1754743
5 TONGAAT  14849148954583.18.%144829
6 ETFPLD  918591952502.79.%23115
7 INVLTD  959596202452.62.%1064159
8 B-AFRICA  16269162993942.48.%1358839
9 MTN  23510235354952.15.%5708046
10 INVPLC  955395681781.90.%1302473
11 STANBANK  14800148502501.72.%3250588
12 COMPCLEAR  42542571.67.%5000
13 TRENCOR  780081401101.43.%102359
14 RMBH  53165316671.28.%1836545
15 SASOL  61456614567721.27.%1526215
16 FIRSTRAND  40774077471.17.%7972311
17 BRAIT  64006447701.11.%325689
18 NETCARE  29162946170.59.%4021895
19 NEPI  90989150490.54.%42480
20 MAS  21502200-30-1.38.%12577

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New Lows
SharenameSaleLowMove% MoveVolume
1 ELLIES   380370-18-4.52.%428941
2 BK-ONE-PR  294294-1-0.34.%500

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Index Summary
Index NameRPMove% Move
Top 4045,730.62593.551.31%
Mid Cap63,950.93456.020.72%
Small Cap54,171.29-22.77-0.04%
Resource 2056,046.41-45.76-0.08%
Industrial 2559,574.201269.342.18%
Financial 1514,534.57119.100.83%
Financial & Ind. 3063,412.011206.141.94%
All Share50,736.42601.891.20%
Oil & Gas 46,506.56584.211.27%
Mining 32,979.53-133.27-0.40%
Gold Mining1,412.2821.551.55%
Platinum Mining47.87-.19-0.40%
GENERAL MINING9,593.99-65.59-0.68%
Oil & Gas Producers 25,005.72314.121.27%
Basic Materials 29,305.85-118.77-0.40%
Chemicals 24,643.15-91.73-0.37%
Forestry & Paper 33,217.35-239.48-0.72%
Industrial Metals 18,929.49179.270.96%
Industrials 46,147.31437.310.96%
General Industrials 145.101.561.09%
Consumer Goods 63,230.201475.112.39%
Automobiles & Parts 9,408.83217.392.37%
Household Goods379.0761.49%
Health Care 82,999.541148.861.40%
Beverages 210.0011.005.53%
Index NameRPMove% Move
Food Producers 76,863.051436.231.90%
Personal Goods 1,094.84.400.04%
Consumer Services 11,985.36294.562.52%
General Retailers 64,748.63556.330.87%
Travel & Leisure 5,831.25-37.86-0.65%
Media 271.3610.444.00%
Support Services 2,897.1825.890.90%
Telecommunications 11,124.99211.161.93%
Financials 37,562.71250.100.67%
Banks 65,857.561020.361.57%
Non-life Insurance 51,940.24-635.51-1.21%
Life Insurance 35,913.6722.040.06%
General Financial 3,771.2257.521.55%
Technology 42,409.6610.740.03%
SHARIAH TOP40 4,242.87170.41%
FTSE/JSE SHARIAH ALL4,360.94200.46%
COAL MINING18,065.073682.08%
FTSE JSE Fledgling 6,707.94-34-0.50%
FTSE/JSE Alt X 1,285.74-7-0.55%
CAPPED PROPERTY 448.55-0.24%
RESOURCE 30,632.34-24-0.08%
DIVIDEND PLUS225.5820.91%
FTSE/JSE RAFI 4010,041.091051.06%
Capped Top 4024,248.503311.38%
Capped All Share25,702.773101.22%
JSE TABACO 8,109.07370.46%

Click here for the Sharenet Index Summary page
Latest Consensus Changes**
CodeCompany NameStatusUpdated
Results Expected**
ExpectedCompany NameFin. Date
11/06/2014INVICTAMarch 2014 (Final)
11/06/2014IVT PREFMarch 2014 (Final)
11/06/2014PERGRINMarch 2014 (Final)
11/06/2014PERGRINPMarch 2014 (Final)
12/06/2014ACUCAPMarch 2014 (Final)

Recent Dividends**
Share NameDec-DateLDTPay-DateAmount
MARSHALL09/06/1427/06/1411/07/14USD 0.0180
IVT PREF05/06/1420/06/1430/06/14ZAR 5.3372
BRAIT04/06/1425/07/1404/08/14ZAR 0.3195
CROOKES03/06/1404/07/1414/07/14ZAR 1.2000
CADIZ02/06/1427/06/1407/07/14ZAR 0.0440
Ex Div**
Share NameDec-DateLDTPay-DateAmount
JDG CONV19/05/1406/06/1420/06/14ZAR 375.0000
INVPREFR22/05/1406/06/1424/06/14ZAR 4.1058
INVESTEC-P22/05/1406/06/1424/06/14ZAR 3.6015
ABIL PREF19/05/1406/06/1417/06/14ZAR 3.4900
INVLTDPREF22/05/1406/06/1424/06/14ZAR 3.3612

Upcoming AGMs**
CodeCompany NameDateStatus
TED2Trencor Ltd.10/06/2014Confirmed
TRETrencor Ltd.10/06/2014Confirmed
SGLSibanye Gold Ltd.17/06/2014Confirmed

Stock Exchange News Service
10/06/201417:48BARLOWORLD LIMITED - Directors dealings in securities
10/06/201417:19NET 1 UEPS TECHNOLOGIES INC - Net1 acquires 2.4 million shares following net set...
10/06/201417:05JSE LIMITED - Index Change Advice - 20140613 Annuity Properties Deletion
10/06/201416:52THE FOSCHINI GROUP LIMITED - Directors associates dealing in securities
10/06/201416:46EVRAZ HIGHVELD STEEL & VANADIUM LTD - Results of AGM
10/06/201416:45MUSTEK LIMITED - Director dealing in securities
10/06/201416:33RESILIENT PROPERTY INCOME FUND LTD - Dealing in securities by an associate of a ...
10/06/201416:27AFRICAN BANK INVESTMENTS LIMITED - Basel III Pillar 3 disclosure as at 31 March ...
10/06/201416:11AFROCENTRIC INVESTMENT CORP LIMITED - Cautionary announcement
10/06/201416:10DOLOMITE CAPITAL LIMITED - Release of Annual Financial Statements - Dolomite Cap...
10/06/201415:33INVESTEC BANK LIMITED - Second Expiry Announcement - ESPIBQ
10/06/201415:30MONDI LIMITED - Mondi Consumer Packaging International AG gives notice to redeem...
10/06/201415:30ATTACQ LIMITED - Dealings in securities by an associate of directors of the comp...
10/06/201415:15ILIAD AFRICA LIMITED - Dealing by Director of a Major Subsidiary
10/06/201415:08SANTOVA LIMITED - Dealing in securities by a director of a major subsidiary
10/06/201414:59TELKOM SA SOC LIMITED - TKG - Unaudited Pro Forma Financial Effects of the Propo...
10/06/201414:25OANDO PLC - Oando Energy Resources executes extention of availability period of ...
10/06/201414:08CAXTON CTP PUBLISHERS & PRINTERS LD - Director's Dealing in Securities
10/06/201414:00AFRICA ETF ISSUER LTD (RF) - ETFPLT Listing of Additional - AfricaPlatinum debe...
10/06/201414:00AFRICA ETF ISSUER LTD (RF) - ETFPLD Listing of additional - AfricaPalladium deb...
10/06/201414:00OCTODEC INVESTMENTS LIMITED - Octodec Invst Ltd \Premium Prop Ltd -Firm Intentio...
10/06/201413:34COMAIR LIMITED - Changes to the board of directors
10/06/201413:30OLD MUTUAL PLC - Public Opening Position Disclosure/Dealing Disclosure by a Pers...
10/06/201413:30SAPPI LIMITED - TRP121: Notification of acquisition of beneficial interest in se...
10/06/201413:10CADIZ HOLDINGS LIMITED - Directors' Interests
10/06/201413:00VILLAGE MAIN REEF LIMITED - Director's Dealings in Securities
10/06/201412:59STRATCORP LIMITED - Further cautionary announcement
10/06/201412:58MICROMEGA HOLDINGS LIMITED - Trading Statement
10/06/201412:49DIPULA INCOME FUND LIMITED - Dealing in securities by an associate of a director...
10/06/201412:30CHEMICAL SPECIALITIES LIMITED - Trading Statement
10/06/201411:57LITHA HEALTHCARE GROUP LIMITED - Results of General Meeting
10/06/201411:11JSE LIMITED - Change to the board of directors: Retirement of a non-executive di...
10/06/201410:30TRADEHOLD LIMITED - Cautionary announcement
10/06/201409:15JSE LIMITED - Labat Africa Limited - Emphasis of matter
10/06/201409:10NEW GOLD ISSUER LIMITED - GLD-Additional Listing of NewGold Debentures
10/06/201409:01REUNERT LIMITED - Notification in terms of Section 122(3)
10/06/201408:22AFRICAN BANK INVESTMENTS LIMITED - ABL/ABLP-Disclosure of significant holding of...
10/06/201408:00ELLIES HOLDINGS LIMITED - Change to the company secretary
10/06/201408:00ALEXANDER FORBES PREF SHARE INV LTD - Notice of general meeting of the ordinary ...
10/06/201407:30CADIZ HOLDINGS LIMITED - Directors' Interests
10/06/201407:05BRITISH AMERICAN TOBACCO PLC - Transaction in own shares
10/06/201407:05LONMIN PLC - Regulatory Release - Inter-governmental technical task team dissolv...

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