Tuesday, 03 February 2015 - 20:00
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Seed Weekly - Hedge fund managers throwing their hats into the ring
Hedge fund managers throwing their hats into the ring
Globally hedge funds have a bad stigma around them, and unfortunately our local hedge funds have been painted with the same brush. While hedge funds aren’t currently regulated in South Africa, the fund managers are. Over the past year the FSB and Treasury have been working together in bringing hedge funds in under collective investment schemes regulation.
Hedge fund managers like Visio Capital and 36ONE Asset Management have both been managing unit trusts for close to 10 years with great success. The graph below shows the cumulative investment growth of the Visio BCI Actinio and 36One Met Flexible Opportunity funds. While both of the funds are in the ASISA Flexible sector, they are typically fully invested into equities.
Over this period both funds comfortably outperformed the All Share Index and the Average General Equity fund. Both fund managers build their portfolios from the bottom up by doing fundamental research on the underlying companies.
Some of the other hedge fund managers that have been making name for the last couple of years are Fairtree, Laurium, Bateleur and Tower. Sanlam has approached Capricorn, Matrix and Kaizen to manage some of the Sanlam Select funds on their behalf. Below is the trailing performance of the funds compared to their peers.
Source: Morningstar Direct
Does a hedge fund manager bring something different to table compared to a traditional fund manager?
Firstly, good hedge fund managers aren’t content with an analyst or broker report. They are not afraid to do the hard work of valuing a company themselves. They are not afraid to get on a plane or bus to go visit the company sites. They don’t only meet with the company’s management, but also meet with their competitors and suppliers. They try to understand the full value chain and where in the chain the company fits in. They do deep, thorough fundamental research on the companies.
Secondly they are used to shorting (selling) a company. A long only unit trust manager is typically only focused on finding good companies. A hedge fund manager isn’t only focused on finding good companies, they are also experienced in searching for bad companies. Therefore, they know which companies to avoid.
Thirdly, hedge fund managers are able to understand and use options in protecting capital and reducing the volatility of their funds. Not all of the hedge fund managers make use of options, but those who do know how to use them in the most cost effective way to enhance the return of their funds.
So do hedge fund managers bring something different to the table? In my opinion, yes. Their different return profiles blend well with other managers during the portfolio construction process. We make use of hedge fund managers to manage long- only strategies in the Seed Absolute Return and Seed Flexible funds.
Kind regards
Gerbrandt Kruger
www.seedinvestments.co.za
info@seedinvestments.co.za
021 914 4966
Tue, 03 Feb 2015
Top News
Local markets
On Tuesday the JSE Overall Index continued its upward momentum gaining 1.08% carried by surging resource stocks which gained 3.93% and financials which gained 1.31%. Full story
South Africa's power utility Eskom will implement rolling blackouts on Tuesday from 1500 GMT to 2000 GMT, the state-owned company said on its official Twitter account.
Eskom had earlier on Tuesday canceled planned rolling blackouts because it had fixed technical faults on some of Full story |
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Egyptian troops fired warning shots over the frontier into Gaza on Tuesday after a bomb exploded on Gaza territory near an Egyptian army convoy, Egyptian security sources said, blaming Islamist group Hamas, which denied the charge. Full storyFive Ukrainian soldiers have been killed and 27 wounded in fighting with pro-Russian separatists in Ukraine's eastern regions in the past 24 hours, Kiev military spokesman Andriy Lysenko said on Tuesday. Full storyMarina's brother and a close family friend have both been killed on the frontline in Ukraine's east. Now she has had to say goodbye to her husband, Ruslan, called up to fight pro-Russian separatists in Kiev's latest conscription drive. Full story |
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Markets | Stock markets around the world
rallied on Tuesday while the U.S. dollar fell after the new
Greek government dropped calls for a write-down. . . Full story | | Gold prices fell 1 percent on
Tuesday as news that the Greek government had dropped calls for
a write-off of its foreign debt. . . Full story | | Hong Kong shares recouped earlier losses
to end higher on Tuesday, as stronger mainland Chinese markets
offset the impact of disappointing U.S. economic. . . Full story | | China stocks ended sharply
higher on Tuesday after five straight days of losses, helped by
financials and energy, after sentiment took a hit. . . Full story |
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| Japanese stocks extended early
losses and fell to a 1-1/2-week low on Tuesday as the results of
the new 10-year Japanese government bonds. . . Full story | | Australian shares surged to a near
seven-year high on Tuesday after the central bank cut interest
rates, ending doubts it will take further. . . Full story | | Global equity markets rose
sharply in choppy trade on Monday on a late rally fueled by
hopes for a deal on Greek debt,. . . Full story | | Gold prices came off
their lows on Monday after unexpectedly weaker U.S. economic
data spurred some safe-haven buying.. . . Full story |
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SA Business | Dangote Flour Mills on Tuesday reported a first-quarter loss before tax of 2.98 billion naira ($15.72 mln), compared with a loss. . . Full story | | South African retailer Edcon launched a cost-cutting plan that may include jobs cuts, it said on Tuesday, as the debt-burdened. . . Full story | | State-owned development funds from Norway and Britain have teamed up to build more power plants in sub-Saharan Africa, the funds, Norfund. . . Full story | | South African power utility Eskom will implement rolling blackouts from 0800 GMT TO 2000 GMT on Tuesday due to technical. . . Full story |
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| South African stocks rose for the third straight session on Tuesday spurred on by investor sentiment that favoured banking and mining shares such as Anglo American Platinum.. . . Full story | | South Africa's oil and gas explorer SacOil Holdings said on Monday it may cancel an agreement to complete an appraisal on a prospective oil asset in Nigeria.. . . Full story | | South Africa's rand retreated against the dollar on Tuesday after strong gains the previous day, tracking Asian markets lower as concerns about the global economic outlook sapped investor appetite for emerging. . . Full story |
World Markets (Spot Prices)
Name | Time | RP | Move | % Move | JSE Overall | 17:00 | 51949.33 | 554.78 | 1.08% | JSE Top 40 | 17:00 | 45708.71 | 520.35 | 1.15% | JSE Gold | 17:00 | 1581.27 | 22.66 | 1.45% | JSE Financial | 17:00 | 43059.66 | 557.33 | 1.31% | JSE Industrial | 17:00 | 72616.79 | 70.14 | 0.10% | JSE Indust 25 | 17:00 | 64183.60 | 37.00 | 0.06% | JSE Resource | 17:00 | 44839.88 | 1694.49 | 3.93% | DJ Futures | 19:38 | 17410.00 | 121.00 | 0.70% | DJ Ind | 19:58 | 17531.77 | 170.73 | 0.98% | SP 500 | 19:58 | 2033.91 | 13.06 | 0.65% | Nasdaq | 19:58 | 4685.74 | 9.05 | 0.19% | FTSE 100 | 17:34 | 6873.17 | 90.62 | 1.34% | DAX | 19:08 | 10890.95 | 62.94 | 0.58% | CAC40 | 19:08 | 4677.90 | 50.23 | 1.09% | Nikkei | 08:28 | 17335.85 | -222.19 | -1.27% | Shanghai | 09:28 | 3204.91 | 76.61 | 2.45% | Hang-Seng | 06:28 | 24406.92 | -31.58 | -0.13% | All Ords | 07:39 | 5666.20 | 79.70 | 1.43% | NZSE 50 | 06:48 | 5781.95 | 25.26 | 0.44% |
| | Name | Time | RP | Move | % Move | Gold $ | 19:59 | 1259.17 | -15.66 | -1.23% | Gold R | 19:59 | 14334.38 | -322.06 | -2.20% | Gold R/kg | 19:58 | 461159 | -8952 | -1.90% | Silver $ | 19:59 | 17.2750 | .0590 | 0.34% | Platinum $ | 19:59 | 1232.70 | 9.20 | 0.75% | Palladium $ | 19:59 | 786.36 | 4.86 | 0.62% | R186 | 17:41 | 7.18 | .01 | 0.21% | R204 | 17:14 | 6.46 | -.02 | -0.31% | R207 | 17:14 | 6.63 | .01 | 0.15% | Brent Crude | 19:58 | 56.23 | 3.24 | 6.11% | Rand / Dollar | 19:59 | 11.3831 | -0.1126 | -0.98% | Rand / Pound | 19:55 | 17.2120 | -0.0365 | -0.21% | Rand / Euro | 19:55 | 13.0627 | 0.0341 | 0.26% | Rand / NZD | 19:59 | 8.3311 | -0.0594 | -0.71% | Rand / AUD | 19:55 | 8.8404 | -0.1210 | -1.35% | Yen / Dollar | 19:59 | 117.3530 | -0.3300 | -0.28% | Euro / Dollar | 19:59 | 0.8714 | -0.0108 | -1.22% | Dollar / Euro | 19:59 | 1.1471 | 0.0136 | 1.20% | Pound / Dollar | 19:55 | 0.6601 | -0.0052 | -0.78% |
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Click here for the Sharenet Spot Price page
The JSE Today
Trading Statistics
Date | Adv. | Decl. | Unch. | Actives | Volume | Value | Trades | Orders |
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03/02/2015 | 248 | 140 | 64 | 452 | 266,337,355 | R17,561,916,641 | 248313 | 95604 | 02/02/2015 | 193 | 171 | 60 | 424 | 209,188,237 | R14,895,825,190 | 204330 | 1482364 | 30/01/2015 | 226 | 134 | 53 | 413 | 274,451,743 | R18,461,203,351 | 207998 | 1543306 | 29/01/2015 | 122 | 242 | 68 | 432 | 240,096,399 | R16,497,378,962 | 202898 | 820834 | 28/01/2015 | 231 | 136 | 70 | 437 | 241,199,350 | R15,249,362,557 | 214918 | 679786 |
* Includes all listed instruments on the JSE
Index Summary Index Name | RP | Move | % Move | Top 40 | 45,708.71 | 520.35 | 1.15% | Industrial | 72,616.79 | 70.14 | 0.10% | Mid Cap | 74,586.51 | 626.03 | 0.85% | Small Cap | 60,612.26 | 111.07 | 0.18% | Resource 20 | 44,839.88 | 1694.49 | 3.93% | Industrial 25 | 64,183.60 | 37.00 | 0.06% | Financial 15 | 16,468.39 | 273.73 | 1.69% | Financial & Ind. 30 | 68,797.16 | 281.83 | 0.41% | All Share | 51,949.33 | 554.78 | 1.08% | Oil & Gas | 35,905.64 | 1849.74 | 5.43% | Mining | 26,868.80 | 878.04 | 3.38% | Gold Mining | 1,581.27 | 22.66 | 1.45% | Platinum Mining | 36.26 | 1.36 | 3.90% | GENERAL MINING | 7,530.13 | 265.40 | 3.65% | Oil & Gas Producers | 19,305.80 | 994.57 | 5.43% | Basic Materials | 24,485.78 | 739.69 | 3.11% | Chemicals | 21,707.45 | -43.75 | -0.20% | Forestry & Paper | 36,522.15 | 484.23 | 1.34% | Industrial Metals | 13,349.38 | 597.53 | 4.69% | Industrials | 47,804.46 | -47.25 | -0.10% | General Industrials | 164.17 | -.95 | -0.58% | Consumer Goods | 62,899.09 | 41.48 | 0.07% | Automobiles & Parts | 7,200.98 | -45.29 | -0.63% | Household Goods | 417.67 | 7 | 1.60% | Health Care | 10,946.04 | -120.42 | -1.09% | Beverages | 211.95 | -1.73 | -0.81% |
| | Index Name | RP | Move | % Move | Food Producers | 9,963.04 | 59.03 | 0.60% | Personal Goods | 967.30 | 7.29 | 0.76% | Consumer Services | 15,718.09 | -66.75 | -0.42% | General Retailers | 82,738.66 | 1126.90 | 1.38% | Travel & Leisure | 6,488.60 | 18.34 | 0.28% | Media | 369.07 | -4.44 | -1.19% | Support Services | 2,843.56 | 11.23 | 0.40% | Telecommunications | 10,354.82 | 198.34 | 1.95% | Financials | 43,059.66 | 557.33 | 1.31% | Banks | 78,164.74 | 1948.74 | 2.56% | Non-life Insurance | 58,688.32 | 497.69 | 0.86% | Life Insurance | 39,272.10 | 354.79 | 0.91% | General Financial | 3,953.61 | 57.96 | 1.49% | Technology | 52,752.58 | -136.79 | -0.26% | SHARIAH TOP40 | 3,582.37 | 107 | 3.08% | FTSE/JSE SHARIAH ALL | 3,880.40 | 96 | 2.53% | COAL MINING | 13,680.91 | 533 | 4.06% | FTSE JSE Fledgling | 6,897.85 | 17 | 0.24% | FTSE/JSE Alt X | 1,543.98 | 20 | 1.29% | SA LISTED PROPERTY | 638.57 | | -0.03% | CAPPED PROPERTY | 549.76 | | 0.06% | RESOURCE | 24,697.34 | 895 | 3.76% | DIVIDEND PLUS | 244.48 | 4 | 1.83% | FTSE/JSE RAFI 40 | 9,931.76 | 171 | 1.75% | Capped Top 40 | 24,409.53 | 285 | 1.18% | Capped All Share | 26,349.65 | 281 | 1.08% | JSE TABACO | 8,270.72 | -35 | -0.42% |
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Click here for the Sharenet Index Summary page
Latest Consensus Changes** Code | Company Name | Status | Updated | SLM | SANLAM LIMITED | HOLD | 02/02/2015 | MDC | MEDICLINIC INTERNATIONAL | BUY | 30/01/2015 | PPC | PRETORIA PORT CEMNT | HOLD | 30/01/2015 | NPK | NAMPAK | HOLD | 30/01/2015 | AVI | AVI LTD | HOLD | 29/01/2015 |
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Results Expected** Expected | Company Name | Fin. Date | 04/02/2015 | RESILIENT | December 2014 (Interim) | 05/02/2015 | NET1UEPS | December 2014 (Interim) | 05/02/2015 | NET1UEPSP | December 2014 (Interim) | 05/02/2015 | NET1UEPSPP | December 2014 (Interim) | 05/02/2015 | RESGEN | December 2014 (Interim) |
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Recent Dividends** Share Name | Dec-Date | LDT | Pay-Date | Amount | HUDACO | 30/01/15 | 27/02/15 | 09/03/15 | ZAR 3.1000 | IMPL CONV | 29/01/15 | 13/02/15 | 23/02/15 | ZAR 250.0000 | CAPPROP | 28/01/15 | 13/02/15 | 23/02/15 | ZAR 0.4422 | FIRSTRANDB-P | 27/01/15 | 13/02/15 | 23/02/15 | ZAR 3.4851 | ECSP A | 23/01/15 | 06/02/15 | 16/02/15 | ZAR 0.7671 |
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Ex Div** Share Name | Dec-Date | LDT | Pay-Date | Amount |
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Upcoming AGMs** Code | Company Name | Date | Status | AWA | Arrowhead Properties Ltd. | 03/02/2015 | Confirmed | AWB | Arrowhead Properties Ltd. | 03/02/2015 | Confirmed | BAW | Barloworld Ltd. | 04/02/2015 | Confirmed | BAWP | Barloworld Ltd. | 04/02/2015 | Confirmed | NPK | Nampak Ltd. | 04/02/2015 | Confirmed |
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