Tuesday, 19 May 2015 - 20:00
Charts
Seed Weekly - The Seed Equity Fund
This week I will be focusing on our youngest fund in our range namely the Seed Equity fund. This is a low cost equity fund managed by Seed, under advice from Prof Paul van Rensburg of Salient Quants. The fund aims to provide investors with returns in excess of the JSE ALSI Total Return (J203T)
Our current fund range is depicted below:
Investment Styles
The major equity investment styles can be broken down into Active versus Passive Management, Value versus Growth, and Large Cap versus Small Cap.
Active versus Passive: Actively managed funds typically have portfolio managers constantly seeking superior returns with for example expert research analysts and big support teams. Trading in the funds can happen on an ongoing basis and investors usually pay more for these funds compared to passively managed funds. On the other hand empirical research shows that over the long run, many passively managed funds generate better returns for their investors compared to similar actively managed funds – with the added bonus of the much lower cost.
Value versus Growth (Momentum): The value investment style is focused on buying the best quality companies for the lowest price possible. Companies in favour would be companies with low price to earnings ratios, high dividend yields and low price to sales ratios. A momentum style would be investing in companies which are growing quickly and typically reinvesting most or all of their earnings to fuel continued growth. These companies typically have lower dividend yields with high earnings growth and high profit margins.
Large Cap versus Small Cap: This is purely a measurement of the size of the company as calculated by its market capitalization. Small Caps generally have greater earnings potential but typically also more risk.
Where does Seed Equity fit in?
According to international research by BCA (The Bank Credit Analyst) if one is looking for solid consistent returns then style diversification is important. The Seed Equity fund makes use of “Smart Alpha” techniques and remains style neutral between value and momentum.
Because the fund has a systematic investment process, we have accurate data since January 2003 and actual portfolio data since 2009. The results below reflect the comparison of the fund’s maximum underperformance and the number of months it spent in drawdown versus a range of well-known funds with a similar history.
All of the funds in this study have outperformed the ALSI since this inception date, but many investors have had to sustain a significant period of underperformance – in some cases up to 10 years.
Ideally a fund also aims to outperform the market on a consistent basis. This is especially important for unit trusts because investors are investing at various stages and therefore each has their own return experience.
From the table above it is evident that the Value and Momentum building blocks individually go through periods of underperformance that are just as long as some of the other active managers. However when blended together the Seed Equity fund has a materially shorter period of ‘longest period of underperformance’ because of the fund’s style diversification.
Performance
In a similar way, the graphs below reflect the separate building blocks and then a composite of a 50/50 blend.
When combined at equal weights it is clear to see on the graph below, that the return profile is smoothed out and in fact the combined styles have achieved a higher cumulative outperformance.
Compared to its peers the fund is relatively young but the two separate strategies do have an actual 5 year track record. The fund has a two year track record and the end of April 2015 the fund returned 19.5% for the 1 year and was ranked 34 out of 132 funds in its category.
In the coming weeks when we will introduce you to our other two funds namely the Seed Absolute and Seed Flexible Funds.
Kind regards,
Renier Hugo
www.seedinvestments.co.za
info@seedinvestments.co.za
021 914 4966
Tue, 19 May 2015
Top News
South Africa's rand weakened on Tuesday as the dollar was buoyed by strong U.S. housing data that revived bets of a rate hike in the world's strongest economy by year-end. Full story
South Africa is investigating several global banks for allegedly fixing foreign exchange trades, joining a worldwide push to probe allegations of price-rigging in currency markets. Full story |
|
A car bomb exploded in the parking lot of Afghanistan's Ministry of Justice on Tuesday, killing at least five people and wounding dozens as civil servants in Kabul were leaving work for the day, officials said. Full storyThailand's junta delayed a general election by at least six months on Tuesday, hours after former Thai Prime Minister Yingluck Shinawatra was banned from travelling overseas, raising questions about a promised return to democracy. Full storyIraqi security forces on Tuesday deployed tanks and artillery around Ramadi to confront Islamic State fighters who have captured the city in a major defeat for the Baghdad government and its Western backers. Full story |
|
|
Markets | Equities around the world
jumped on Tuesday and the euro tumbled on signals the European
Central Bank may accelerate its 1 trillion euro. . . Full story | | Gold's five-day rally ran out of
steam on Tuesday as the dollar extended gains after positive
U.S. data while global shares gained ground. . . Full story | | Hong Kong stocks rose on Tuesday, led by
Chinese companies, as excitement in mainland markets over
accelerated economic reform and financial deregulation rippled
across. . . Full story | | China stocks jumped over 3
percent on Tuesday, their biggest one-day gain in four months,
with financial shares leading the charge after
Beijing published. . . Full story |
|
| Australian shares dropped for a
second consecutive session on Tuesday as renewed weakness in
iron ore weighed on sentiment, while New Zealand stocks. . . Full story | | Japanese stocks rose to a
three-week high on Tuesday thanks to Wall Street's record close
and a surge in companies announcing higher shareholder. . . Full story | | Wall Street stocks rose on
Monday to record highs on hopes the Federal Reserve will hold
off raising interest rates, while the dollar. . . Full story | | Gold reached a
three-month high on Monday, rising for a fifth session as a run
of soft U.S. data supported expectations that the. . . Full story |
|
SA Business | South Africa's biggest cement maker PPC Ltd on Tuesday launched a price and cost-cutting strategy to boost earnings by as much. . . Full story | | South Africa will start the process to procure a nuclear fleet to generate 9,600 megawatts of power this year, the energy. . . Full story | | South Africa is stronger than its peers with a stable outlook despite various challenges and a ratings change is therefore unlikely. . . Full story | | South African firm Bidvest Group's offer to buy all the shares it does not already own in pharmaceutical company Adcock Ingram. . . Full story |
|
| Administrators of the furniture arm of failed lender African Bank Investments said on Tuesday creditors were paid 14 percent of what. . . Full story | | Shares in Exxaro Resources fell on Tuesday after South Africa's second-biggest coal miner said lower export iron ore prices hit its. . . Full story | | The risks for another credit downgrade on South Africa's rating are evenly balanced with those for an upgrade, a senior Moody's. . . Full story | | South African electronics and electrical group Reunert posted an 11 percent rise in first-half headline earnings per share on growth in. . . Full story |
|
| South African fishing firm Oceana Group said on Tuesday it will acquire the entire share capital of U.S. based Daybrook Fisheries for $382.3 million, sending its stock higher.. . . Full story |
|
Company News | Shareholders are advised that at the AGM of the Company held on Tuesday, 19 May 2015, all the resolutions set out. . . Full story | | Shareholders are advised that Exxaro will release its reviewed annual financial results for the six-month period ending 30 June 2015 on. . . Full story | | Subsequent to Mr JHM SchurinkÆs resignation from the Gunvor Group, he has notified the Keaton board of his intention to resign. . . Full story | | Shareholders of Tiger Brands are referred to the announcement released by Oceana Group Ltd. (ôOceanaö) on SENS relating to the acquisition. . . Full story |
|
| Growthpoint's leading market position, strong balance sheet and its property portfolioÆs increased resilience and defensive nature have contributed to Moody's Investors. . . Full story | | Ellies shareholders are referred to the announcement released on SENS on 4 May 2015 wherein shareholders were advised of, inter alia,. . . Full story | | According to Business Day Barloworld had its automotive business to thank for much of its 16% increase in headline earnings per. . . Full story | | PPC informed stakeholders that there will be a webcast of its 2015 interim results presentation at 10h00 on 19 May 2015.. . . Full story |
|
Company Results | Revenue for the interim period grew by 22% to R5.8 billion (R4.7 billion). Operating profit shot up 158% to R550.2 million. . . Full story | | Revenue for the interim period increased to R30.7 billion (2014: R29.9 billion). EBITDA rose to R3.0 billion (2014: R2.8 billion), operating. . . Full story | | Revenue increased to R77.3 billion (R75.7 billion). Operating profit lowered to R19.2 billion (R20.4 billion). Profit attributable to equity holders rose. . . Full story | | Revenue for the interim period rose to R9.4 billion (2014: R8.8 billion). Gross profit increased to R3 billion (2014: R2.7 billion),. . . Full story |
World Markets (Spot Prices)
Name | Time | RP | Move | % Move | JSE Overall | 17:00 | 54327.13 | -82.30 | -0.15% | JSE Top 40 | 17:00 | 48143.09 | -118.91 | -0.25% | JSE Gold | 17:00 | 1158.66 | -46.47 | -3.86% | JSE Financial | 17:00 | 46250.29 | 474.09 | 1.04% | JSE Industrial | 17:00 | 77365.65 | 166.40 | 0.22% | JSE Indust 25 | 17:00 | 68875.54 | 130.83 | 0.19% | JSE Resource | 17:00 | 42902.86 | -1537.26 | -3.46% | DJ Futures | 19:58 | 18309.00 | 50.00 | 0.27% | DJ Ind | 19:58 | 18349.23 | 50.35 | 0.28% | SP 500 | 19:58 | 2132.85 | 3.65 | 0.17% | Nasdaq | 19:58 | 5081.58 | 3.14 | 0.06% | FTSE 100 | 17:35 | 6995.10 | 26.23 | 0.38% | DAX | 18:08 | 11853.33 | 259.05 | 2.23% | CAC40 | 18:08 | 5117.30 | 104.99 | 2.09% | Nikkei | 08:32 | 20026.38 | 136.11 | 0.68% | Shanghai | 09:28 | 4417.55 | 134.06 | 3.13% | Hang-Seng | 06:28 | 27706.87 | 115.62 | 0.42% | All Ords | 08:43 | 5619.40 | -40.60 | -0.72% | NZSE 50 | 07:48 | 5757.16 | -15.55 | -0.27% |
| | Name | Time | RP | Move | % Move | Gold $ | 19:59 | 1207.87 | -17.61 | -1.44% | Gold R | 19:59 | 14381.84 | -163.59 | -1.12% | Gold R/kg | 19:58 | 462493 | -4250 | -0.91% | Silver $ | 19:59 | 17.1260 | -.5530 | -3.13% | Platinum $ | 19:59 | 1150.90 | -22.10 | -1.88% | Palladium $ | 19:59 | 776.20 | -9.80 | -1.25% | R186 | 16:58 | 8.04 | -.03 | -0.31% | R204 | 16:53 | 7.27 | -.00 | -0.07% | R207 | 16:53 | 7.51 | .00 | 0.07% | Brent Crude | 19:58 | 63.99 | -2.58 | -3.88% | Rand / Dollar | 19:59 | 11.9032 | 0.0371 | 0.31% | Rand / Pound | 19:55 | 18.4300 | -0.1299 | -0.70% | Rand / Euro | 19:55 | 13.2686 | -0.1708 | -1.27% | Rand / NZD | 19:59 | 8.7440 | -0.0361 | -0.41% | Rand / AUD | 19:55 | 9.4302 | -0.0648 | -0.68% | Yen / Dollar | 19:59 | 120.6900 | 0.6900 | 0.58% | Euro / Dollar | 19:59 | 0.8974 | 0.0136 | 1.54% | Dollar / Euro | 19:59 | 1.1142 | -0.0173 | -1.53% | Pound / Dollar | 19:55 | 0.6450 | 0.0062 | 0.97% |
|
Click here for the Sharenet Spot Price page
The JSE Today
Trading Statistics
Date | Adv. | Decl. | Unch. | Actives | Volume | Value | Trades | Orders |
---|
19/05/2015 | 187 | 171 | 54 | 412 | 267,452,140 | R16,664,660,004 | 220238 | 1719685 | 18/05/2015 | 199 | 147 | 54 | 400 | 273,780,755 | R15,186,830,642 | 207212 | 1499450 | 15/05/2015 | 216 | 149 | 60 | 425 | 237,855,440 | R16,604,163,198 | 197791 | 1497963 | 14/05/2015 | 156 | 201 | 52 | 409 | 242,132,104 | R15,934,843,121 | 236747 | 1324893 | 13/05/2015 | 170 | 190 | 69 | 429 | 286,000,537 | R22,171,053,169 | 281938 | 1079772 |
* Includes all listed instruments on the JSE
Index Summary Index Name | RP | Move | % Move | Top 40 | 48,143.09 | -118.91 | -0.25% | Industrial | 77,365.65 | 166.40 | 0.22% | Mid Cap | 74,881.81 | 266.28 | 0.36% | Small Cap | 62,254.86 | 148.93 | 0.24% | Resource 20 | 42,902.86 | -1537.26 | -3.46% | Industrial 25 | 68,875.54 | 130.83 | 0.19% | Financial 15 | 17,535.53 | 175.24 | 1.01% | Financial & Ind. 30 | 73,951.84 | 250.44 | 0.34% | All Share | 54,327.13 | -82.30 | -0.15% | Oil & Gas | 34,708.60 | 2539.65 | 7.89% | Mining | 25,899.86 | -911.01 | -3.40% | Gold Mining | 1,158.66 | -46.47 | -3.86% | Platinum Mining | 31.12 | -.72 | -2.26% | GENERAL MINING | 7,668.22 | -272.95 | -3.44% | Oil & Gas Producers | 18,662.18 | 1365.53 | 7.89% | Basic Materials | 24,316.09 | -662.76 | -2.65% | Chemicals | 22,901.67 | -482.60 | -2.06% | Forestry & Paper | 45,519.84 | 790.14 | 1.77% | Industrial Metals | 9,073.13 | -415.20 | -4.38% | Industrials | 45,939.89 | 384.89 | 0.84% | General Industrials | 161.78 | 1.47 | 0.92% | Consumer Goods | 68,676.42 | 323.00 | 0.47% | Automobiles & Parts | 8,401.14 | 22.64 | 0.27% | Household Goods | 532.42 | 3 | 0.62% | Health Care | 10,504.34 | 138.60 | 1.34% | Beverages | 229.47 | -.96 | -0.42% |
| | Index Name | RP | Move | % Move | Food Producers | 9,090.90 | 171.42 | 1.92% | Personal Goods | 1,090.75 | 10.99 | 1.02% | Consumer Services | 16,646.22 | -21.67 | -0.13% | General Retailers | 86,794.99 | 224.68 | 0.26% | Travel & Leisure | 6,581.59 | -27.41 | -0.41% | Media | 403.00 | -.34 | -0.08% | Support Services | 2,971.49 | 83.62 | 2.90% | Telecommunications | 11,484.69 | -18.58 | -0.16% | Financials | 46,250.29 | 474.09 | 1.04% | Banks | 82,297.87 | 251.82 | 0.31% | Non-life Insurance | 57,583.20 | 541.07 | 0.95% | Life Insurance | 44,257.93 | 815.79 | 1.88% | General Financial | 4,585.46 | 76.72 | 1.70% | Technology | 63,912.23 | 411.02 | 0.65% | SHARIAH TOP40 | 3,759.55 | -57 | -1.50% | FTSE/JSE SHARIAH ALL | 3,997.55 | -50 | -1.23% | COAL MINING | 11,327.01 | -493 | -4.17% | FTSE JSE Fledgling | 7,009.87 | 2 | 0.03% | FTSE/JSE Alt X | 1,336.68 | 13 | 0.97% | SA LISTED PROPERTY | 651.66 | | 0.67% | CAPPED PROPERTY | 566.78 | | 0.89% | RESOURCE | 23,508.22 | -826 | -3.39% | DIVIDEND PLUS | 235.48 | -1 | -0.54% | FTSE/JSE RAFI 40 | 10,173.78 | -73 | -0.72% | Capped Top 40 | 25,697.61 | -63 | -0.25% | Capped All Share | 27,555.71 | -42 | -0.15% | JSE TABACO | 8,598.10 | 75 | 0.88% |
|
Click here for the Sharenet Index Summary page
Latest Consensus Changes** Code | Company Name | Status | Updated | CFR | COMPAGNIE FIN RICHEMONT | BUY | 18/05/2015 | ASR | ASSORE LTD | HOLD | 16/05/2015 | LHC | LIFE HEALTHCARE GRP HLDG ... | HOLD | 15/05/2015 | OML | OLD MUTUAL PLC | BUY | 15/05/2015 | REM | REMGRO LIMITED | HOLD | 14/05/2015 |
|
|
Results Expected** Expected | Company Name | Fin. Date | 20/05/2015 | INFRASORS | February 2015 (Final) | 20/05/2015 | SPAR | March 2015 (Interim) | 20/05/2015 | TIGBRANDS | March 2015 (Interim) | 21/05/2015 | AFRIMAT | February 2015 (Final) | 21/05/2015 | DENEB | March 2015 (Final) |
|
Recent Dividends** Share Name | Dec-Date | LDT | Pay-Date | Amount | VODACOM | 18/05/15 | 19/06/15 | 29/06/15 | ZAR 4.0000 | NETCARE | 18/05/15 | 11/06/15 | 22/06/15 | ZAR 0.3800 | BARWORLD | 18/05/15 | 05/06/15 | 15/06/15 | ZAR 1.1500 | ASTRAL | 18/05/15 | 05/06/15 | 15/06/15 | ZAR 5.7500 | PNR FOODS | 18/05/15 | 26/06/15 | 06/07/15 | ZAR 0.9500 |
|
|
Ex Div** Share Name | Dec-Date | LDT | Pay-Date | Amount | PHUMELELA | 10/04/15 | 15/05/15 | 25/05/15 | ZAR 0.2800 | SPANJAARD | 27/02/15 | 15/05/15 | 25/05/15 | ZAR 0.1800 | DCENTRIX | 20/04/15 | 15/05/15 | 25/05/15 | ZAR 0.0946 | RIPLC | 29/04/15 | 15/05/15 | 05/06/15 | GBP 0.0160 |
|
Upcoming AGMs** Code | Company Name | Date | Status | BGA | Barclays Africa Group Ltd. | 19/05/2015 | Confirmed | ILA | Iliad Africa Ltd. | 21/05/2015 | Confirmed | ILAA | Iliad Africa Ltd. | 21/05/2015 | Confirmed | JSE | JSE Ltd. | 21/05/2015 | Confirmed | PET | Petmin Ltd. | 22/05/2015 | Confirmed |
|
|
Stock Exchange News Service Click here for more SENS news
|