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STANLIB Global Equity Fund - News
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Stanlib Global Equity comment - Mar 11
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Tuesday, 14 June 2011
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Fund Manager Comment
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Markets
Global equity markets ended 2010 on a strongly positive note. The MSCI World Index rose 9.1% in US dollar terms in the fi nal quarter taking the return for the year as a whole to 12.3%. Japan and North America led the rally, rising by 12% and 11% respectively, while continental Europe lagged, rising 4%, and thus just managing to put in a positive return for the year of 2.4%. (Though the EMU/Euro member countries within Europe actually fell 3.4% over the year.) Other than lagging Europe, most regional returns were notably close to each other for the year. Emerging markets rose by 19.2%, Asia ex-Japan 17.1%, North America 16% and Japan by 15.6%. The UK was stuck halfway between the leaders and laggards at 8.8%. All industry groups rose through the quarter. Cyclicals such as mining, engineering, energy, chemicals and autos led the way, while banks lagged along with the more defensive pharmaceutical and telecom sectors. 2010 also ends on a positive economic note, with data releases on balance continuing to surprise to the upside and analysts continuing to upgrade corporate earnings expectations for 2011. The analysts' consensus is now for a 16% rise in earnings next year, following this year's impressive 44%. This puts world markets on a trailing price/earnings ratio of under 15, and a forward ratio of around 12.5. While not therefore at unreasonable valuations, the key questions for 2011 remain how markets might react were global interest rates and bond yields fi nally to rise to more normal levels, how much further the authorities in emerging markets might tighten policy (most obviously in China), and how the problems of the Eurozone will develop.
Fund Performance
The Fund's "A" shares rose by 10.1% in US Dollars in the quarter, compared to the MSCI World Index which rose by 9.1%. For 2010 as a whole the fund rose by 15.1%, 2.8% ahead of the index return of 12.3%.
Effectiveness of our approach
2010 as a whole has seen something of the "return to rationality" which we both expected and hoped would occur, with investors focussing on underlying company profi tability and rewarding those companies whose prospects were improving the fastest. An interesting aspect of 2010 was perhaps the historically low spread of returns across companies, with the best outperforming the worst by a smaller than average margin. As the "easy" earnings growth is likely to be behind us, we might expect this gap to be wider in 2011, hopefully to our advantage.
Portfolio Positioning
Once again over the last quarter we have made only small changes to the portfolio's overall geographic and sectoral positioning. Technology and emerging markets remain our key overweights, along with an increasing industrial exposure, while we still struggle to fi nd attractive names in the fi nancial sector
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Stanlib Global Equity comment - Dec 10
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Friday, 25 February 2011
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Fund Manager Comment
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Markets
Global equity markets ended 2010 on a strongly positive note. The MSCI World Index rose 9.1% in US dollar terms in the fi nal quarter taking the return for the year as a whole to 12.3%. Japan and North America led the rally, rising by 12% and 11% respectively, while continental Europe lagged, rising 4%, and thus just managing to put in a positive return for the year of 2.4%. (Though the EMU/Euro member countries within Europe actually fell 3.4% over the year.) Other than lagging Europe, most regional returns were notably close to each other for the year. Emerging markets rose by 19.2%, Asia ex-Japan 17.1%, North America 16% and Japan by 15.6%. The UK was stuck halfway between the leaders and laggards at 8.8%. All industry groups rose through the quarter. Cyclicals such as mining, engineering, energy, chemicals and autos led the way, while banks lagged along with the more defensive pharmaceutical and telecom sectors. 2010 also ends on a positive economic note, with data releases on balance continuing to surprise to the upside and analysts continuing to upgrade corporate earnings expectations for 2011. The analysts' consensus is now for a 16% rise in earnings next year, following this year's impressive 44%. This puts world markets on a trailing price/earnings ratio of under 15, and a forward ratio of around 12.5. While not therefore at unreasonable valuations, the key questions for 2011 remain how markets might react were global interest rates and bond yields fi nally to rise to more normal levels, how much further the authorities in emerging markets might tighten policy (most obviously in China), and how the problems of the Eurozone will develop.
Fund Performance
The Fund's "A" shares rose by 10.1% in US Dollars in the quarter, compared to the MSCI World Index which rose by 9.1%. For 2010 as a whole the fund rose by 15.1%, 2.8% ahead of the index return of 12.3%.
Effectiveness of our approach
2010 as a whole has seen something of the "return to rationality" which we both expected and hoped would occur, with investors focussing on underlying company profitability and rewarding those companies whose prospects were improving the fastest. An interesting aspect of 2010 was perhaps the historically low spread of returns across companies, with the best outperforming the worst by a smaller than average margin. As the "easy" earnings growth is likely to be behind us, we might expect this gap to be wider in 2011, hopefully to our advantage.
Portfolio Positioning
Once again over the last quarter we have made only small changes to the portfolio's overall geographic and sectoral positioning. Technology and emerging markets remain our key overweights, along with an increasing industrial exposure, while we still struggle to fi nd attractive names in the financial sector.
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Stanlib Global Equity comment - Sep 10
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Wednesday, 5 January 2011
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Fund Manager Comment
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Markets
Global equity markets rose sharply in September. The MSCI World Index rose 9.4% in US dollar terms, its strongest monthly gain since April 2009, early in the market rally, and its 9th strongest month on record. Asia, emerging markets and continental Europe were the regional leaders with solid double-digit gains, while Japan was the notable laggard as continuing upward pressure on the Yen raised further deflationary fears for the Japanese economy. Sector leadership was with the cyclicals: household goods, engineering, autos, mining and IT hardware. Defensive sectors such as food producers and utilities were the laggards, though no sector failed to generate a positive return. Banks and other financials were also amongst the laggards. It is actually quite difficult to know exactly how to explain September's strong gains. Economic data releases were on balance in line with expectations, and analysts have if anything been cautious about raising estimates ahead of third quarter announcements. Perhaps a technical explanation would be more accurate in this case. At the start of the month markets appeared oversold, having fallen back quite sharply in August, while investor sentiment surveys were at that point close to bearish lows. Against a background of attractive valuations (below 13x 2010 earnings) and continuing loose monetary policy with strong hints of a second dose of quantitative easing ahead, it therefore did not take much fundamental news to spark a rally. While the rise in prices has obviously taken valuations higher, at still below 14x 2010 and around 12x 2011 consensus earnings, global equity markets are not obviously expensive. Meanwhile from a technical perspective the world index has broken above both the highs of two months ago and the key 200-day moving average, both positive signals.
Fund Performance
The Fund's "A" shares rose by 11.5% in US Dollars in September, compared to the MSCI World Index return of 9.4%. On a 12 month view the fund is now 1.4% ahead of the benchmark.
Effectiveness of our approach
With aggregate earnings upgrades having stalled, investor attention has been drawn more clearly to those companies whose estimates are still being raised. By the same token, investors have also been attracted by companies with the strongest profitability and high expected future growth. We regard both of these developments as part of what we have previously described as the market's return to "rationality" - a return which clearly suits our own investment approach.
Portfolio Positioning
As has been the case for some time, we have made only small changes to the portfolio's overall geographic and sectoral positioning through September. Technology and emerging markets remain our key overweights, while we struggle to fi nd attractive names in the financial sector. The new Basle rules on capital adequacy, while being introduced only slowly, will have the inevitable (and intended) consequence of reducing bank leverage and thus potential future return on equity, certainly relative to their extraordinarily high pre-crisis levels.
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Stanlib Global Equity comment - Jun 10
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Thursday, 9 September 2010
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Fund Manager Comment
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Market
Global equity markets as measured by the MSCI World index fell by 3.4% in US dollar terms in June, continuing the weak trend which saw the index fall by over 10% through the second quarter. Emerging markets, where investors remain more confident of continuing growth, held up relatively well, as did developed Asia and (for once) continental Europe, while the US, Japan and the UK were hit hardest. Defensive sectors such as food producers, tobacco, pharmaceuticals and telecom utilities managed to eke out a small advance, while technology, retailers, oils and miners saw some of the larger declines. As we noted last month, market fears for the future have not yet been reflected in any noticeable downgrading of earnings growth estimates for 2010 or 2011. The half year reporting season, due to kick off in the second week of July, may well prove critical in setting the tone for global equity markets for the second half of the year. Meanwhile it appears that the technical and fundamental positions of world markets have now swapped places relative to how they appeared at the start of the year, with technical weakness somewhat offset by much better value, with the global p/e ratio for 2010 currently around 13.
Fund Performance
The Fund's "A" shares declined by 3.2% in US Dollars in June, compared to the MSCI World Index return of -3.4%.
Effectiveness of our approach
Although markets remain quite volatile with as yet no return to stable leadership, the speculation of much of last year has given way to a greater focus on those characteristics which drive share price performance over the long term: shareholder wealth creation, relative valuation and relative earnings revisions. In this sense, despite the volatility, the market environment appears to be returning to what we regard as normality. As a result, while we are lagging the index somewhat on a 12 month view, we are in line so far in 2010, and ahead over the last quarter.
Portfolio Positioning
The two key relative positions which we have taken over the past 18 months remain in place. A large number of technology names continue to exhibit high profitability, attractive valuations and relative strength in both business and price momentum. On the other hand, financial stocks, and especially banks, appear especially unattractive, with what appeared to be a nascent recovery now once again rolling over, especially and most obviously in Europe. Our regional biases are also broadly unchanged. Growth, earnings and price leadership remains with the emerging markets, while we continue to find little to attract us in Europe or Japan.
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Fund Name Changed
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Thursday, 22 July 2010
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Official Announcement
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The STANLIB Offshore International Fund will change it's name to STANLIB Global Equity Fund, effective from 22 July 2010
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Stanlib International comment - Mar 10
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Tuesday, 29 June 2010
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Fund Manager Comment
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Market
The first quarter of 2010 started shakily but ended strongly (March's performance was the strongest since July 2009) leaving the MSCI World Index with a gain of 3.4%. Japan, having lagged the recent rally quite significantly, was the strongest gainer, rising 8%, while Europe was the only region which fell over the quarter (down just over 2%) as a result of the well-publicised fiscal problems of the smaller members of the Eurozone. Cyclical consumer sectors such as retailers and cyclical industrial and basic materials sectors were the clear leaders, while pharmaceuticals, telecoms, oils and utilities were the laggards. While global markets appear in great shape from a technical perspective, valuations are beginning to reach less attractive levels. The world is currently trading at 19 x 2009 earnings and even with consensus forecasts looking for growth of 33% in 2010 that still leaves the forward global p/e ratio at 14. The next challenge for markets, assuming there is no "double-dip", will be the eventual ending of currently super-easy monetary conditions as the Federal Reserve and other central banks face up to the prospect of having to return interest rates to more normal levels.
Fund Performance
The Fund's "A" shares rose by 1.6% in US dollars in the first quarter of 2010, compared to the MSCI World Index return of 3.4%.
Effectiveness of our approach
The last twelve months saw investors embrace the riskiest equities: those with lowest quality earnings, highest leverage, and the greatest sensitivity to economic and financial stabilisation, even though such companies were not, until more recently, experiencing superior (or even any) earnings upgrades. Our approach therefore struggled through much of this period. More recently however, although still with some volatility as in January, the market appears to be beginning to return to what we regard as rationality. With valuation parameters across sectors at unusually close levels, from this point we believe that investors are likely to reward undervalued quality and pay increasing attention to earnings revisions, in other words the kind of normal market environment of which our investment approach is designed to take advantage.
Portfolio Positioning
Overall, the geographic and sectoral shape of the portfolio remains very stable. Our major regional positioning remains an overweighting of emerging markets, where we can still find good quality companies with great earnings and price momentum at reasonable value, at the expense of Europe and Japan. In sector terms we remain very enthusiastic about the prospects of a large number of technology stocks, as well as many very high quality pharmaceutical stocks which appear quite exceptionally undervalued. On the flipside we are still finding very few financial stocks which match our criteria.
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Stanlib International comment - Dec 09
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Friday, 19 March 2010
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Fund Manager Comment
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I manage the fund with a top-down approach where I aim to add value both via tactical asset allocation in terms of regional deviations from the benchmark and via manager selection within Fidelity. This approach complements the bottom-up stock picking of the selected underlying managers and performance comes from my decisions as well as from security selection. I did not change my tactical asset allocation as well as manager selection over the quarter.
Tactical asset allocation retained
I maintained my regional weightings versus benchmark, with a preference for developing over developed regions. I have a bias towards Asia ex Japan and emerging markets vis-a-vis the US and Europe. I remain neutral on Japan. I believe Asia ex Japan and emerging markets can benefit from the current global economic ecovery, and offer better returns in a global equity portfolio. Conversely, the US tends to be a defensive area in risk-averse environments, and might underperform in market rallies.
No changes in manager selection
I am happy with the manager selection in place, as the objective is to have a global equity exposure with a lower volatility than a singlemanager approach. The current mix is well diversified with managers that are lowly correlated to each other on account of their different investment styles.
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Stanlib International comment - Sep 09
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Monday, 30 November 2009
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Fund Manager Comment
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The fund generated robust positive returns, but underperformed its benchmark over the quarter, mainly due to stock selection in the European segment of the portfolio. Here, relatively low exposure to banks, which generated strong returns, undermined performance. Stock picking in diversified financials, notably a position in Deutsche Boerse, which was negatively impacted by concerns about falling volumes and higher costs, also hampered returns. Security selection in other regional segments, however, added value. Notably, in the US, stock picking in energy firms was beneficial. A position in Anadarko benefited from news of a new oil discovery, while an underweight stance in Exxon Mobil added value, as its share price fell after a sizeable drop in second quarter earnings and a number of plant closures. Asset allocation decisions also proved rewarding. A bias towards European equities at the expense of the UK contributed, as did an overweight stance in Pacific ex Japan.
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Stanlib International comment - Jun 09
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Friday, 18 September 2009
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Fund Manager Comment
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The fund outperformed its benchmark over the period, mainly due to stock selection in the US and Japanese segments of the portfolio. In the former, positions in technology hardware and equipment firms, notably Brocade Communications, added value. Its quarterly results surpassed estimates and it gained more market share from its rival Cisco. In the Japanese portion, lack of exposure to the defensive utilities sector was rewarding. Electric power and gas firms lagged as risk appetite improved.
Conversely, an underweight stance in banks, which performed strongly over the quarter, detracted from returns of the European segment. Stock picking in the Pacific ex Japan and emerging market portions also proved unfavourable. Asset allocation contributed to relative returns. In particular, an overweight stance towards Pacific ex Japan and emerging markets added value. However, the impact was partially counteracted by the bias towards Continental Europe at the expense of UK equities.
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Stanlib International comment - Dec 08
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Wednesday, 25 March 2009
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Fund Manager Comment
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Positions in banks detracted from the performance of the European segment of the portfolio due to continued concerns about their capital adequacy. Moreover, falling oil prices hurt returns from energy stocks. In the Japanese portion, lack of exposure to defensive electric power utilities hurt returns, as did positions in export orientated firms. Conversely, stock picking in the US and Pacific ex-Japan was beneficial. In the former, low exposure to prominent diversified financials supported relative returns, while in the latter, an overweight stance in defensive sectors like telecommunications was rewarding.
Asset allocation decisions added value over the quarter. I maintained the portfolio's bias towards the eurozone at the expense of the UK, which proved helpful. An underweight in the US also supported performance. However, this was partially offset by off-benchmark holdings in Emerging Markets.
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Stanlib International comment - Sep 08
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Friday, 14 November 2008
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Fund Manager Comment
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Over the period, the fund under performed its benchmark amid heightened volatility in equity markets.
The underperformance was due largely to stock selection in the US and European segments of the portfolio. Here, positions in materials and energy stocks detracted from returns, as prices of several commodities, including oil, chemicals and metals, fell in light of a deteriorating outlook for global demand. Holdings in capital goods firms were also hampered by expectations of weakening economic activity and a more challenging pricing environment. Moreover, in the European segment, a relatively low exposure to food & beverage stocks hurt performance because investors favoured companies less likely to be impacted by the economic slowdown.
In terms of asset allocation, a bias towards European equities and an off-benchmark exposure to Emerging Markets inhibited returns, as did an underweight position in the defensive US market. In contrast, below-benchmark holdings in the UK added value.
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Stanlib International comment - Jun 08
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Monday, 22 September 2008
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Fund Manager Comment
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The fund outperformed its benchmark over the period and was ranked in the first quartile of its peer group in terms of performance.
Stock selection in the European and US portions of the portfolio was particularly beneficial to returns. A cautious stance towards banks, which continued to report losses due to their exposure to risky assets, boosted returns from both the regional sub-portfolios. Positions in chemicals firms were also rewarding. The requirement for better yields from agricultural land and increased crop plantation for bio-fuels drove demand for fertilisers. This, coupled with a tight supply situation, supported agrochemicals holdings. Moreover, in the US portion, positions in oil-drilling firms, which benefited from higher demand for rigs, buoyed performance.
In terms of asset allocation, a bias towards Europe at the expense of the UK detracted, as the former under performed other markets over the quarter. An underweight in the US also hurt relative returns.
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Stanlib International comment - Mar 08
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Friday, 11 July 2008
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Fund Manager Comment
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Fund selection hurt returns, with the US segment proving particularly detrimental. Four of the five US holdings underperformed their benchmarks. Here, positions in the capital goods and technology hardware & equipment sectors undermined performance in light of concerns over a slowdown in economic activity. Elsewhere, investments in capital goods firms and in diversified financials, whose revenue forecasts were downgraded, hurt the returns of the South East Asia Fund.
The contribution of asset allocation was mixed. An above-index exposure to Continental Europe and an underweight in the UK proved rewarding, while an off-benchmark position in Emerging Markets and an overweight in Asia ex Japan hurt returns, since these regions underperformed the rest of the world.
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Stanlib International comment - Dec 07
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Thursday, 6 March 2008
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Fund Manager Comment
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"Asset allocation contributed to relative returns. The fund's above-benchmark holding in continental European equities proved rewarding, as market performance was supported by relatively positive third-quarter earnings releases and renewed M&A activity. Exposure to the Emerging Markets was also favourable, as they outperformed other bourses over the quarter.
Stock selection was also beneficial to relative returns. In particular, the fund's US holdings added value. Here, positions in fertilizer companies were boosted by improved profit forecasts. Holdings in technology hardware and equipment firms also aided performance, as did a relatively low exposure to diversified financials. Conversely, investments in electrical machinery and wholesale-trade firms did not help relative returns of the Japanese portfolios."
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Stanlib International comment - Sep 07
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Tuesday, 27 November 2007
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Fund Manager Comment
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The fund outperformed its benchmark over the review period.
Asset allocation contributed to returns during the quarter. The overweight positions in Europe ex-UK, Asia ex-Japan and Emerging Markets, proved beneficial especially in July and September. The underweight position in the US also helped relative returns in July and September, while it was less supportive in August. The underweight UK position aided relative returns throughout the quarter. Japan is a neutral position.
Stock selection was also beneficial. In the European portion of the portfolio, holdings among materials stocks contributed to performance. In particular, the holdings in steel manufacturer ArcelorMittal gained from strong demand and higher prices for steel. Positions in the Asia Pacific segment also generated strong returns. For example, holdings in China Merchants Bank, which has significant exposure to the growing retail segment in China, proved beneficial.
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Stanlib International comment - Jun 07
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Tuesday, 25 September 2007
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Fund Manager Comment
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During the quarter, the fund outperformed its benchmark.
Asset allocation contributed to returns. The fund's bias towards Continental European equities proved rewarding, as the region's earnings momentum remained healthy. The exposure to Emerging Markets, which traditionally outperform against a backdrop of improving global growth, also enhanced returns. Conversely, the below-benchmark exposure to UK quities proved detrimental.
The strong performance of the North American portion of the portfolio was beneficial to returns. In particular, the strength of holdings in the chemicals and construction & engineering sectors boosted performance. Positions in the Asia Pacific segment also contributed. Here, investments in China Merchants Bank proved beneficial, after the bank reported strong earnings figures. Meanwhile, the holding in the Global Property Fund detracted amid expectations of higher interest rates.
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Stanlib International comment - Mar 07
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Thursday, 24 May 2007
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Fund Manager Comment
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The fund outperformed its benchmark during the review period. Asset allocation contributed to returns during the quarter. The fund's bias towards Continental European equities proved particularly rewarding, as the region's stocks were supported by M&A activity and upbeat corporate results. A relative lack of exposure to US stocks, which underperformed during the period, also boosted returns. A bias towards the Asia Pacific markets was also advantageous, as strong domestic demand helped buoy stock prices. Security selection in the US was the most beneficial to performance, with four of the five underlying funds outperforming their benchmarks. Holdings among oil refiners profited from strong demand and healthy refining margins. Stock picking also proved productive in the European segment. Conversely, in the Japanese component of the fund, investments in export dependent electrical machinery manufacturing firms detracted from returns, as a strengthening yen weighed on sentiment.
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Stanlib International comment - Dec 06
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Monday, 26 March 2007
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Fund Manager Comment
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During the quarter, the fund returned 8.4% in US dollar terms, in line with its benchmark index, which also returned 8.4% over the same period. Asset allocation made a significant contribution to returns. The fund's bias towards Continental European equities proved particularly rewarding, as did an underweight position in US markets. However, this was partially counteracted by a relative lack of exposure to UK equities. Stock selection in the Japanese component of the portfolio proved the most detrimental influence on aggregate performance, with two of the three underlying funds underperforming their benchmark indices. Here, the weakness of holdings in the banking sector was a common theme. In the UK segment, exposure to gaming stocks eroded returns, following a US ban on online gambling. Conversely, European investments had a positive impact on performance, particularly holdings in banks, media firms and food manufacturers. Stock picking also proved beneficial in the Asia Pacific (ex Japan) component of the fund.
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Stanlib International comment - Sep 06
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Monday, 26 March 2007
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Fund Manager Comment
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During the quarter, the fund returned 1.4% in US dollar terms, underperforming its benchmark index, which returned 4.5% over the same period. In terms of asset allocation, a positive stance towards the markets of Europe and the Asia Pacific region proved rewarding. However, this was counteracted by the portfolio's comparative lack of exposure to US equities, in light of their relative outperformance this quarter. Stock selection in the US component of the portfolio, which accounts for more than 40% of the fund's assets, proved the most detrimental influence on aggregate performance. Here, the weakness of the underlying funds' positions in the oil refining, airlines and metals & mining sectors was especially detrimental. The European component of the fund also undermined overall returns, with the negative influence of holdings in smaller companies proving noteworthy. Exposure to gaming stocks was also significantly counterproductive after a US ban on online gambling gave rise to fears of greater regulation in the European Union
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Stanlib International comment - Jun 06
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Tuesday, 28 November 2006
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Fund Manager Comment
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During the quarter, the fund returned -3.1% in US dollar terms, underperforming the benchmark index, which returned - 0.5% over the same period. Stock selection and asset allocation both detracted from returns this quarter as investors, ignoring underlying fundamentals, sold indiscriminately. Stock selection in the fund's US component, which accounts for over 40% of the fund's assets, detracted the most. Holdings in the healthcare equipment & services and consumer durables sectors proved particularly disappointing. The performance of the Japanese segment, which had limited exposure to defensive sectors, also hurt returns. Although the holding in the Japan Smaller Companies Fund was trimmed over the quarter, the residual position proved counterproductive. The key detractor in terms of asset allocation was the underweight exposure to the UK market, which outperformed as a result of the defensive nature of some of its key constituents. This was partially offset by the fund's overweight position in Continental Europe, which proved beneficial in light of the resilience of regional stocks.
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Stanlib International comment - Mar 06
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Friday, 25 August 2006
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Fund Manager Comment
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Aggregate performance was bolstered by particularly rewarding security selection in the US, which was complemented by sound stock picking in the markets of continental Europe, the UK and the Pacific (ex Japan) region. Conversely, the choice of individual holdings in the underlying Japanese portfolios detracted from returns. From a global perspective, security selection was beneficial across much of the capitalisation scale. On a global sector basis, stock picking amongst capital goods and materials businesses enhanced returns. However, this was partially offset by the weakness of holdings in the health care and technology hardware sectors. The fund's performance was boosted by its overweight exposure to the energy sector as refining stocks attracted renewed investor support following a disappointing fourth quarter.
The manager maintained the fund's underweight exposure to US equities throughout the period. Although the macroeconomic backdrop remained sound, he continued to believe that better investment opportunities could be found in markets where the associated economies were at a less advanced stage in their economic and monetarytightening cycles. At the same time, the portfolio's overweight exposure to continental European markets was maintained. Conservative GDP forecasts for some of the larger economies, especially Germany, suggest that eurozone growth could surprise on the upside in the months ahead. Meanwhile, a comparatively soft UK economy continued to imply that a moderately underweight stance towards this market was warranted. Elsewhere, the manager continued to favour the markets of Japan and the neighbouring Asia Pacific region. Japan remains on a firm growth trajectory while continued Chinese economic expansion should provide upward momentum across the subcontinent.
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Standard Bank International comment - Sep 05
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Tuesday, 20 December 2005
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Fund Manager Comment
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During the quarter, stock selection within the US portion of the fund was the largest contributor to returns. Stock picking amongst European and UK companies also proved positive. Stock selection in South East Asia was broadly neutral, while stock picking amongst Japanese companies detracted from returns.
Returns were boosted by individual holdings in the energy, banks and diversified financial sectors, while overweight exposure to the energy and capital goods sectors proved beneficial.
Valero Energy was the largest single contributor; the independent oil refiner was boosted by strong demand for oil refining at a time when capacity has been limited. Selected stocks within the consumer sector - notably homebuilders - performed disappointingly as investors became increasingly concerned about their future earnings prospects in an environment of mixed economic data.
Although the fund remained underweight the US relative to the benchmark index, US economic indicators are, on the whole, encouraging. Business confidence seems resilient, and strong corporate balance sheets also offer potential for corporate growth.
The fund's exposure to the UK was increased. Investors are hopeful that the current economic slowdown will prove temporary and that, in spite of inflationary concerns, interest rates will be cut further to allow consumer spending to recover.
The fund remained overweight Europe. The economic outlook for Europe remains mixed, and peripheral economies continue to prosper. Although the larger economies remain weak, signs - such as rising company earnings - are encouraging.
Meanwhile, the portfolio's overweight exposure to Japan was increased. Investors will be seeking confirmation that Japanese growth is sustainable following impressive share-price gains in the third quarter.
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Standard Bank International comment - Jun 05
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Thursday, 17 November 2005
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Fund Manager Comment
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During the quarter, stock selection within the US was the largest contributor to performance. Holdings in Europe, Japan, emerging markets and South East Asia were also positive, whereas stock selection in the UK was negative. On a global sector basis, exposure to energy, consumer durables & apparel and telecommunication services companies added value. Stock picking among medium-sized companies proved very beneficial.
The fund's holding in Nextel Communications was the largest single contributor to returns.
The fund's exposure to a number of homebuilders boosted performance, as rising house prices and levels of sales are being fuelled by low mortgage rates and increasing employment. Valero Energy continued to perform well, due principally to the high oil price.
The portfolio manager maintained the fund's underweight exposure to the US relative to the benchmark index. The fund's underweight exposure to UK equities and overweight exposure to Japanese equities were both reduced. The portfolio manager increased the fund's overweight position in Europe.
Although the US economy remains one of the strongest among the developed markets, with a buoyant housing market underpinned by healthy jobs growth, it is very difficult to predict whether this situation will persist.
In the UK, the economy is showing signs of softening, particularly among manufacturers. Consumer spending is flagging as well. The Continental European economic picture is mixed, with core countries remaining weak. Political uncertainty has increased with two 'no' votes on the proposed EU constitution. Nevertheless, stock valuations remain attractive, and earnings are still increasing.
Despite signs of slowing exports to China and the US, the environment in Japan remains broadly positive.
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Standard Bank International comment - Mar 05
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Friday, 1 July 2005
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Fund Manager Comment
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Stock selection among US, European, emerging markets, Japanese and South East Asian companies was positive. Stock picking in the UK had little effect on performance. On a global sector basis, individual investment decisions within the banking, media, energy and telecommunication services sectors were slightly offset by the negative returns generated by holdings in insurance companies.
The fund's holding in Valero Energy, boosted relative performance during the period. Demand for oil refining has been very strong and as the number of refineries is limited, Valero has been able to make healthy profits.
Within the insurance sector, the fund's holding in American International Group hampered returns. The share price of AIG suffered as investor sentiment towards the stock turned negative amid an investigation into the company's financial affairs by a Federal Grand Jury.
The portfolio manager maintained the fund's underweight exposure to the US and UK markets relative to the benchmark index. In addition, the fund remained overweight European and Japanese equities.
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Standard Bank International comment - Dec 04
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Thursday, 17 March 2005
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Fund Manager Comment
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Stock selection in the US, the UK and emerging markets contributed positively to performance. This was offset by negative stock selection in Europe and Japan. On a global sector basis, positive stock selection within the telecommunication services and consumer durables & apparel sectors and an underweight exposure to pharmaceuticals & biotechnology companies were offset by negative returns generated from holdings within the energy and healthcare equipment & services sectors.
The fund's holding in Nextel Communications proved rewarding. The share price of the US telecommunication services company rose over the three-month period after it reported strong third-quarter profits.
Exposure to energy equipment & services companies detracted from performance. In particular, a certain energy equipment company suffered as investors took profits in oil-related stocks following a decline in the price of oil.
The portfolio manager increased the fund's underweight exposure to both US and UK equities relative to the benchmark index. The manager increased the fund's overweight position in Europe. The fund's overweight exposure to Japanese equities was reduced over the quarter.
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Standard Bank International comment - Sep 04
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Monday, 29 November 2004
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Fund Manager Comment
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During the quarter, the fund returned -0.8% in US dollar terms, outperforming the benchmark MSCI World Index, which returned -1.0% over the same period. Stock selection among European and US equities contributed positively to performance. This was offset by negative security selection and asset allocation in Japan. On a global sector basis, successful investment decisions within the consumer durables & apparel and health care equipment & services sectors, as well as the benefit of an underweight exposure to food, beverage & tobacco companies, were offset by negative returns generated from holdings within the telecommunication services and media sectors. Exposure to healthcare companies boosted performance. Specifically, the share price of top-ten holding Unitedhealth Group rose over the quarter after the US healthcare provider announced a 36% increase in second-quarter profits from the same period last year. Meanwhile, shares in Nextel Communications fell over the three-month period. Although the US telecommunications company reported strong second-quarter profits, there are concerns over the effect of rising expenses, including taxes, on future revenue growth.
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