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Investec GSF Global Equity Fund A Inc - News
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Investec GSF Global Equity comment - Dec 09
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Friday, 26 March 2010
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Fund Manager Comment
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Market Background
Global equity markets continued to move ahead in December as investor confidence levels maintained an upward trend helped by continued positive economic news and low interest rates. This was in spite of a large amount of new issuance, particularly from the banking sector.
Industrial and technology stocks led the trend, reflecting expectations of further recovery during 2010 and positive news flow regarding sales and industrial production levels over the course of the month. The healthcare sector also enjoyed some renewed interest following the ratification of separate bills for US healthcare reform by both the Senate and the House of Representatives, with both excluding a public plan option (where the State provides healthcare in place of the private sector). The final draft of the bill remains to be fine tuned but there is a growing belief that the legislation could prove less onerous for healthcare companies than had been initially feared.
Financial stocks generally underperformed after a huge amount of new issuance from the banks in an attempt to free themselves from the Troubled Asset Relief Programme (TARP) restrictions and to bolster capital ratios. Citigroup, Wells Fargo, Bank of America, Lloyds and Mitsubishi UFJ all raised billions of dollars in the capital markets at a time when concerns over new Basel 3 regulatory requirements regarding leverage and capital are causing uncertainty in the sector.
Oil stocks did little during the month, as both Exxon and Total moved to make acquisitions (the former for XTO Energy and the latter for Chesapeake Energy) and mining stocks were also held back by a recovery in the US dollar. It has been interesting however that in the latter part of the month, metal and oil prices began to rise again despite further appreciation of the currency.
Japan also saw a reversal in its currency. This was accompanied by a sharp recovery in export related stocks in Tokyo as investors perceived that competitive advantage was being gained from a cheaper yen.
Overall, market volumes remained low and volatility declined in December, perhaps the most important indicator that the normalisation process taking place in the world's capital markets continues apace.
Fund Performance
The Investec GSF Global Equity Fund returned 2.1% ('A' share class, net of fees, in US dollars) during December while the MSCI World Index returned 1.8%.
The Fund's outperformance was delivered entirely from stock selection. The industrials sector added the most value with good performances from Aggreko, the equipment leasing company, and FLSmidth, the plant manufacturing business. Owning Nissan in the automotives sector also helped as the weaker yen boosted all the Japanese exporters. Chemical stocks within the Fund also performed well after our investment process correctly steered us into the sector several months ago. Speciality chemical stocks such as Nitto Denko and LG Chem are benefitting from strong demand from the technology sector, while Mosaic gained as the demand for fertiliser is expected to increase in 2010.
Banks eased during the month on concerns over momentum in the credit markets and weaker trading volumes amongst the investment banks. Our performance within the sector was mixed with a good performance from Turk Guaranty Bank offsetting weakness in Bank of America and Credit Suisse. Several of our general retailing stocks that play to the value segment suffered in the month, including Best Buy, eBay and Wal-Mart.
Overall however, a satisfactory month and finish to 2009.
Portfolio Activity
Significant purchases
IDEX Corp: An Illinois pumps and fluid controls business manufacturing systems for waste water, LNG and fuel, and drinks dispensers and other applications. Inventory levels have been reduced and company has good operating leverage into a recovery. We believe it is a good quality company where the strategy of focusing on niche products drives good returns and cash flow, margins are very strong and it is attractively valued.
Avnet: Electronics and computer component distributor. Improving demand from the technology sector is resulting in repeated raised guidance of both sales and margins. Valuations are low and we believe analysts have been slow to give the company credit for both the improved operating environment and also the push into more value added services which should help margins over time.
Significant sales
Goodrich: Supplies aerospace components, systems and services to its global customers. The stock has disappointed quarter after quarter on aftermarket revenue and yet has performed well and re-rated relative to the sector. We believe that Goodrich is a high quality company but that the valuation is now discounting a robust recovery with little evidence that commercial aerospace is currently on that trajectory.
Tesoro: US petrochemical refining company. At current refining margins the company looks set to make a substantial loss in 2010 and although a recovery in gasoline demand should help (this should follow a recovery in the US and specifically California where they are most exposed), the sector has far too much capacity. As such there are no medium term catalysts for this company and yet their high leverage requires a return to free cash flow generation in the near term.
Market Outlook
Entering 2010, we believe the world's equity markets are in reasonable condition. Functionality in the credit markets has returned and equity raising in both the primary and secondary markets has gathered momentum, further enhancing the general strength of corporate balance sheets. Money has now begun the next stage in the transition from cash to bonds and is moving strongly to equities as risk appetite continues to grow as a result of greater confidence and the paucity of alternative income producing assets.
In our view, this process is likely to continue through 2010, although government support for capital markets may be gradually withdrawn and the funding markets would then have to function without it. We also worry about the extent of the legislative wave that approaches the financial sector and how the balance between capital adequacy and provision of finance to the corporate and consumer sectors is achieved.
Following on from a year where deep value has been rewarded, we look to 2010 as the year when those corporations that succeed in delivering an enhanced operating performance at a time of muted, but positive economic performance may be rewarded by the investment community. Especially as clear value opportunities are likely to be significantly less prevalent (with perhaps the exception of the financial sector).
We would also anticipate a stronger focus on quality as institutional money flows to equities. Quality companies have been broadly neglected as buyers have looked for cyclical exposure rather than size and strength and this group appears good value relative to its history.
In this context, we expect further progress for markets in the medium term but anticipate more broadly based leadership where quality is added to the mix of value and momentum factors.
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Investec GS Global Equity comment - Sep 09
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Thursday, 17 December 2009
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Fund Manager Comment
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Global equity markets offer a diverse range of opportunities to investors. Investing in more than one market can reduce risk and improve returns by holding, in a single portfolio, strong companies that are subject to different operating and economic conditions. The Global Equity Fund is able to choose its investments from companies that are expected to benefit from Asia's robust economic growth or expansion opportunities in other emerging markets, and blend them with giant companies in America's sophisticated market or firms that stand to gain from the development of the European Union. In the past, diversification has proved a sensible investment strategy as global stock markets have produced mixed performances.
The Fund takes a broadly sector-neutral approach. The Fund Manager uses a proprietary stock-picking approach that aims to ensure the Fund includes attractively valued companies with strong performance records and an improving earnings outlook that are receiving growing investor attention. The majority of its investments are in developed markets, such as America and Europe, with a smaller exposure to emerging markets.
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Investec GS Global Equity comment - Jun 09
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Tuesday, 15 December 2009
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Fund Manager Comment
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Global equity markets offer a diverse range of opportunities to investors. Investing in more than one market can reduce risk and improve returns by holding, in a single portfolio, strong companies that are subject to different operating and economic conditions. The Global Equity Fund is able to choose its investments from companies that are expected to benefit from Asia's robust economic growth or expansion opportunities in other emerging markets, and blend them with giant companies in America's sophisticated market or firms that stand to gain from the development of the European Union. In the past, diversification has proved a sensible investment strategy as global stock markets have produced mixed performances.
The Fund takes a broadly sector-neutral approach. The Fund Manager uses a proprietary stock-picking approach that aims to ensure the Fund includes attractively valued companies with strong performance records and an improving earnings outlook that are receiving growing investor attention. The majority of its investments are in developed markets, such as America and Europe, with a smaller exposure to emerging markets.
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Investec GS Global Equity comment - Mar 09
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Tuesday, 9 June 2009
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Fund Manager Comment
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Global equity markets offer a diverse range of opportunities to investors. Investing in more than one market can reduce risk and improve returns by holding, in a single portfolio, strong companies that are subject to different operating and economic conditions. The Global Equity Fund is able to choose its investments from companies that are expected to benefit from Asia's robust economic growth or expansion opportunities in other emerging markets, and blend them with giant companies in America's sophisticated market or firms that stand to gain from the development of the European Union. In the past, diversification has proved a sensible investment strategy as global stock markets have produced mixed performances.
The Fund takes a broadly sector-neutral approach. The Fund Manager uses a proprietary stock-picking approach that aims to ensure the Fund includes attractively valued companies with strong performance records and an improving earnings outlook that are receiving growing investor attention. The majority of its investments are in developed markets, such as America and Europe, with a smaller exposure to emerging markets.
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Investec GS Global Equity comment - Dec 08
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Friday, 27 March 2009
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Fund Manager Comment
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Global equity markets offer a diverse range of opportunities to investors. Investing in more than one market can reduce risk and improve returns by holding, in a single portfolio, strong companies that are subject to different operating and economic conditions. The Global Equity Fund is able to choose its investments from companies that are expected to benefit from Asia's robust economic growth or expansion opportunities in other emerging markets, and blend them with giant companies in America's sophisticated market or firms that stand to gain from the development of the European Union. In the past, diversification has proved a sensible investment strategy as global stock markets have produced mixed performances.
The Fund takes a broadly sector-neutral approach. The Fund Manager uses a proprietary stock-picking approach that aims to ensure the Fund includes attractively valued companies with strong performance records and an improving earnings outlook that are receiving growing investor attention. The majority of its investments are in developed markets, such as America and Europe, with a smaller exposure to emerging markets.
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Investec GS Global Equity comment - Sep 08
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Thursday, 27 November 2008
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Fund Manager Comment
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Global equity markets offer a diverse range of opportunities to investors. Investing in more than one market can reduce risk and improve returns by holding, in a single portfolio, strong companies that are subject to different operating and economic conditions. The Global Equity Fund is able to choose its investments from companies that are expected to benefit from Asia's robust economic growth or expansion opportunities in other emerging markets, and blend them with giant companies in America's sophisticated market or firms that stand to gain from the development of the European Union. In the past, diversification has proved a sensible investment strategy as global stock markets have produced mixed performances.
The Fund takes a broadly sector-neutral approach. The Fund Manager uses a proprietary stock-picking approach that aims to ensure the Fund includes attractively valued companies with strong performance records and an improving earnings outlook that are receiving growing investor attention. The majority of its investments are in developed markets, such as America and Europe, with a smaller exposure to emerging markets.
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Investec GS Global Equity comment - June 08
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Monday, 15 September 2008
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Fund Manager Comment
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Global equity markets offer a diverse range of opportunities to investors. Investing in more than one market can reduce risk and improve returns by holding, in a single portfolio, strong companies that are subject to different operating and economic conditions. The Global Equity Fund is able to choose its investments from companies that are expected to benefit from Asia's robust economic growth or expansion opportunities in other emerging markets, and blend them with giant companies in America's sophisticated market or firms that stand to gain from the development of the European Union. In the past, diversification has proved a sensible investment strategy as global stock markets have produced mixed performances.
The Fund takes a broadly sector-neutral approach. The Fund Manager uses a proprietary stock-picking approach that aims to ensure the Fund includes attractively valued companies with strong performance records and an improving earnings outlook that are receiving growing investor attention. The majority of its investments are in developed markets, such as America and Europe, with a smaller exposure to emerging markets.
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Investec GS Global Equity comment - June 05
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Friday, 29 July 2005
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Fund Manager Comment
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Global equity markets offer a diverse range of opportunities to investors. Investing in more than one market can reduce risk and improve returns by holding, in a single portfolio, strong companies that are subject to different operating and economic conditions.
The Fund is able to choose its investments from companies that are likely to benefit from Asia's robust economic growth or expansion opportunities in other emerging markets, and blend them with giant companies in America's sophisticated market or firms that stand to gain from the development of the European Union. Diversification has proved a sensible investment strategy as global stock markets have produced mixed performances.
The Fund takes a broadly sector neutral approach, with investments spread across defensive stocks and those more exposed to the global economic cycle. The manager uses a proprietary stock picking approach to focus the Fund's holdings on attractively valued companies with strong performance records and an improving earnings outlook that are receiving growing investor attention. The majority of its investments are in developed markets, such as America and Europe, with a smaller exposure to emerging markets.
Economic data signalling the health of the major economies shows sustained growth, albeit at a more normal level, and while the gains in corporate profitability are slowing, equities are still taking some support from reasonable company results. Going forward, the Fund's stock picking approach aims to continue to add value by focusing on shares expected to outperform.
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Investec GS Global Equity comment - Mar 05
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Wednesday, 22 June 2005
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Fund Manager Comment
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Global equity markets offer a diverse range of opportunities to investors. Investing in more than one market can reduce risk and improve returns by holding, in a single portfolio, strong companies that are subject to different operating and economic conditions.
The Fund is able to choose its investments from companies that are likely to benefit from Asia's robust economic growth or expansion opportunities in other emerging markets, and blend them with giant companies in America's sophisticated market or firms that stand to gain from the development of the European Union. Diversification has proved a sensible investment strategy as global stock markets have produced mixed performances.
The Fund takes a broadly sector neutral approach, with investments spread across defensive stocks and those more exposed to the global economic cycle. The manager uses a proprietary stock picking approach to focus the Fund's holdings on attractively valued companies with strong performance records and an improving earnings outlook that are receiving growing investor attention. The majority of its investments are in developed markets, such as America and Europe, with a smaller exposure to emerging markets.
Economic data signalling the health of the major economies shows sustained growth, albeit at a more normal level, and while the gains in corporate profitability are slowing, equities are still taking some support from reasonable company results. Going forward, the Fund's stock picking approach aims to continue to add value by focusing on shares expected to outperform.
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Investec GS Global Equity comment - Dec 04
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Friday, 28 January 2005
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Fund Manager Comment
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Global equity markets offer a diverse range of opportunities to investors. Investing in more than one market can reduce risk and improve returns by holding, in a single portfolio, strong companies that are subject to different operating and economic conditions. The Fund is able to choose its investments from companies that are likely to benefit from Asia's robust economic growth or expansion opportunities in other emerging markets, and blend them with giant companies in America's sophisticated market or firms that stand to gain from the development of the European Union. Diversification has proved a sensible investment strategy as global stock markets have produced mixed performances.
The Fund takes a broadly sector neutral approach, with investments spread across defensive stocks and those more exposed to the global economic cycle. The manager uses a proprietary stock picking approach to focus the Fund's holdings on attractively valued companies with strong performance records and an improving earnings outlook that are receiving growing investor attention. The majority of its investments are in developed markets, such as America and Europe, with a smaller exposure to emerging markets.
Economic data signalling the health of the major economies shows sustained growth, albeit at a more normal level and corporate profitability remains strong, which is likely to provide some support to equities. Going forward, the Fund's stock picking approach aims to continue to add value by focusing on shares expected to outperform.
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Investec GS Global Equity comment - Sep 04
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Tuesday, 2 November 2004
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Fund Manager Comment
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Global equity markets offer a diverse range of opportunities to investors. Investing in more than one market can reduce risk and improve returns by holding, in a single portfolio, strong companies that are subject to different operating and economic conditions. The Fund is able to choose its investments from companies that are likely to benefit from Asia's robust economic growth or expansion opportunities in other emerging markets, and blend them with giant companies in America's sophisticated market or firms that stand to gain from the development of the European Union. Diversification has proved a sensible investment strategy as global stock markets have produced mixed performances.
The Fund takes a broadly sector neutral approach, with investments spread across defensive stocks and those more exposed to the global economic cycle. The manager uses a proprietary stock picking approach to focus the Fund's holdings on attractively valued companies with strong performance records and an improving earnings outlook that are receiving growing investor attention. The majority of its investments are in developed markets, such as America and Europe, with a smaller exposure to emerging markets.
Economic data signalling the health of the major economies shows sustained growth, albeit at a more normal level and corporate profitability remains strong, which is likely to provide some support to equities. Going forward, the Fund's stock picking approach aims to continue to add value by focusing on shares expected to outperform.
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Investec GS Global Equity comment - Jun 04
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Tuesday, 17 August 2004
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Fund Manager Comment
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Global equity markets offer a diverse range of opportunities to investors. Investing in more than one market can reduce risk and improve returns by holding, in a single portfolio, strong companies that are subject to different operating and economic conditions. The Fund is able to choose its investments from companies that are likely to benefit from Asia's robust economic growth or expansion opportunities in other emerging markets, and blend them with giant companies in America's sophisticated market or firms that stand to gain from the development of the European Union. Diversification has proved a sensible investment strategy as global stock markets have produced mixed performances.
The Fund takes a broadly sector neutral approach, with investments spread across defensive stocks and those more exposed to the global economic cycle. The manager uses a proprietary stock picking approach to focus the Fund's holdings on attractively valued companies with strong performance records and an improving earnings outlook that are receiving growing investor attention. The majority of its investments are in developed markets, such as America and Europe, with a smaller exposure to emerging markets.
Investor sentiment has improved considerably over the past year and economic data signalling the health of the major economies has shown distinct improvement. Going forward, the Fund's stock picking approach aims to continue to add value by focusing on shares expected to outperform.
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Investec GS Global Equity comment - Dec 03
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Thursday, 12 February 2004
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Fund Manager Comment
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Global equity markets offer a diverse range of opportunities to investors. Investing in more than one market can reduce risk and improve returns by combining strong companies that are subject to different operating and economic conditions. The Fund is able to choose its investments from Asia's burgeoning growth, promising companies in other emerging markets, giant companies in America's sophisticated market or firms benefiting from the development of the European Union. Diversification has proved a sensible investment strategy as global stock markets have produced mixed performances.
The Fund takes a broadly sector neutral approach, with investments spread across defensive stocks and those more exposed to the global economy. The manager uses a proprietary stock picking approach to focus the Fund's holdings on attractively valued companies with strong performance records and an improving earnings outlook that are receiving growing investor attention. The majority of its investments are in developed markets, such as America and Europe, with a small exposure to emerging markets.
Investor sentiment has improved considerably in the past few months and economic data signalling the health of the major economies has shown distinct improvement. Going forward, the Fund's stock picking approach aims to continue to add value by focusing on shares expected to outperform.
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Investec GS Global Equity comment - Sep 03
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Monday, 10 November 2003
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Fund Manager Comment
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Global equity markets offer a diverse range of opportunities to investors. Investing in more than one market can reduce risk and improve returns by combining strong companies that are subject to different operating and economic conditions. Global equity investors could choose from Asia's burgeoning growth, promising companies in other emerging markets, giant companies in America's sophisticated market and firms benefiting from the development of the European Union. Diversification has proved a sensible investment strategy as global stock markets have produced a mixed performance.
The fund takes a broadly sector neutral approach, with investments spread across defensive stocks and those more exposed to the global economy. The manager uses a proprietary stock picking approach to focus the fund's holdings on attractively valued companies with strong performance records and an improving earnings outlook that are receiving growing investor attention. Most of its investments are in developed markets, like America and Europe, with a small exposure to emerging markets.
Investor sentiment has improved considerably in the past few months and economic data signalling the health of the major developed economies has begun to improve. Going forward, the fund's stock picking approach aims to continue to add value by focusing on shares likely to outperform.
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Investec GS Global Equity comment - June 2003
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Tuesday, 12 August 2003
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Fund Manager Comment
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Global equity markets offer a diverse range of opportunities to investors. Investing in more than one market can reduce risk and improve returns by combining strong companies that are subject to different operating and economic conditions. Global equity investors could choose from Asia's burgeoning growth, promising companies in other emerging markets, giant companies in America's sophisticated market and firms benefiting from the development of the European Union. Diversification has proved a sensible investment strategy as global stock markets have produced a mixed performance.
The fund takes a broadly sector neutral approach, with investments spread across defensive stocks and those more exposed to the global economy. It is currently biased towards mid cap stocks, such as US mortgage related financials, US and Spanish house builders and managed healthcare stocks. The manager uses a proprietary stock picking approach to focus the fund's holdings on attractively valued companies with strong performance records and an improving earnings outlook that are receiving growing investor attention. Most of its investments are in developed markets, like America and Europe, with a small exposure to emerging markets.
Investor sentiment has improved considerably in the past few months, though economic data signalling the health of the major developed economies remains mixed. Going forward, the fund's stock picking approach aims to continue to add value by focusing on shares likely to outperform.
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Investec GS Global Equity comment - March 2003
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Thursday, 8 May 2003
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Fund Manager Comment
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Global equities have suffered three difficult years. Overblown stock prices are taking time to deflate, concerns over war in Iraq have caused volatility and faltering economic growth is sapping corporate profits. However, as a consequence, share prices have fallen to more realistic levels and companies have responded by cutting costs and focusing on cash flow to improve their financial health.
The fund uses an innovative bottom up stock picking process to choose the best opportunities offered by global equity markets. While it has not escaped the worldwide stockmarket decline, it has outperformed its index due to good stock picking. Our disciplined equity stock picking process also performs well when markets trend - either up or down. US consumer related industrial and services mid-cap stocks - which were not correlated to the overall market - helped performance. Performance also came from European oil stocks like ENI, a leading oil and gas producer that made several large strategic acquisitions at reasonable prices. The fund remains largely sector neutral to cushion itself against risk.
The global economy is expected to improve in the second half of 2003. However, even if the market environment remains difficult, the combination of good value and defensive earnings shown by the companies in the fund should sustain its relative performance.
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Investec GS Global Equity comment - December 2002
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Friday, 7 February 2003
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Fund Manager Comment
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The key feature of the fund is its rigorous investment process. It uses a highly disciplined bottom up process to build a relatively focused portfolio. Although the weightings to the major industry sectors are broadly in line with those of the benchmark MSCI World index, the fund is very much actively managed at the stock level. In selecting stocks it uses a proprietary system that takes into account factors such as valuations, earnings momentum, price momentum and financial strength. It uses quantitative tools to evaluate the positions that the fund is taking relative to the benchmark and to control tracking error.
The fund has been unable to escape the effects of the recent falls in the global stockmarket. However, it has benefited from the overweighting to medium-capitalisation stocks that have been highlighted as a result of the screening process. In addition, the fund had comparatively little exposure to the major telecommunications companies that were sold down sharply, or to the prominent groups like Worldcom or Enron which were at the heart of the various accounting scandals.
Going forward, the fund's distinctive approach is expected to continue to add value. It stands to benefit from the opportunity to purchase shares in companies with established franchises and strong competitive positions that have become oversold.
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Investec GS Global Equity comment - October 2002
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Monday, 25 November 2002
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Fund Manager Comment
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The key feature of the Fund is its rigorous investment process. The fund managers use a highly disciplined bottom up process to build a relatively focused portfolio. Although the weightings to the major industry sectors are broadly in line with those of the benchmark MSCI World index, the Fund is very much an actively managed portfolio. In selecting stocks the fund managers use a proprietary system that takes into account factors such as valuations, earnings momentum, price momentum and financial strength. The fund managers use quantitative tools to evaluate the positions that the Fund is taking relative to the benchmark and to control tracking error. The Fund has been unable to escape the effects of the recent falls in the global stockmarket. However, the Fund has benefited from the overweighting to medium-capitalisation stocks that have been highlighted as a result of the screening process. In addition, the Fund had comparatively little exposure to the major telecommunications companies that were sold down sharply, or to the prominent groups which were at the heart of the various accounting scandals. Going forward, the Fund's distinctive approach should, the fund managers believe, continue to add value. It could benefit from the existence of a number of individual stocks with established franchises and strong competitive positions that have been oversold.
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Investec GS Global Equity comment - September 2002
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Wednesday, 20 November 2002
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Fund Manager Comment
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The key feature of the Fund is its rigorous investment process. We use a highly disciplined bottom up process to build a relatively focused portfolio. Although the weightings to the major industry sectors are broadly in line with those of the benchmark MSCI World index, the Fund is very much an actively managed portfolio. In selecting stocks we use a proprietary system that takes into account factors such as valuations, earnings momentum, price momentum and financial strength. We use quantitative tools to evaluate the positions that the Fund is taking relative to the benchmark and to control tracking error.
The Fund has been unable to escape the effects of the recent falls in the global stockmarket. However, the Fund has benefited from the overweighting to medium-capitalisation stocks that have been highlighted as a result of the screening process. In addition, the Fund had comparatively little exposure to the major telecommunications companies that were sold down sharply, or to the prominent groups which were at the heart of the various accounting scandals.
Going forward, the Fund's distinctive approach should, we believe, continue to add value. It could benefit from the existence of a number of individual stocks with established franchises and strong competitive positions that have been oversold.
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Investec GS Global Equity comment - June 2002
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Monday, 9 September 2002
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Fund Manager Comment
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The weakness of global stockmarkets continued in June. The economic statistics that were released in Europe and the USA in June were generally positive, but mixed. Major central banks kept rates on hold and a number of commentators fretted about the possibility that the global economy might endure a "double dip". Stockmarkets in general, and "new economy" areas in particular, were extremely volatile: the Worldcom scandal highlighted how the earnings of many companies that appeared to be growing rapidly through the late 1990s may have been grossly overstated. A wide variety of prominent companies issued profit warnings and/or remarked on how operating conditions remain difficult.
Your Adviser remains confident that the Fund's disciplined, bottom up, approach to stock selection will continue to deliver superior results. Over the last month or so, the Fund's approach has determined that it is somewhat overweight to North America, somewhat underweight to continental Europe and very underweight to Japan. Your Adviser is concerned that global investors fail fully to appreciate the implications for individual stocks of the economic slowdown and structural problems in Japan. Relative to the benchmark MSCI World index, style bias and tracking error have been reduced.
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Investec GS Global Equity comment April 2002
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Monday, 10 June 2002
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Fund Manager Comment
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During April, global stockmarkets were dominated by widespread fears that the upswing in the US economy is faltering. Most economic indicators were positive but, unlike in previous months, not stronger than had been expected. A broad variety of prominent companies, including General Electric and IBM, posted disappointing results and/or issued warnings about future sales trends. Unlike in March, the best performing stockmarket sectors tended to be defensive areas such as branded consumer goods and utilities. By contrast, stocks in the technology, media and telecommunications sectors were sold down sharply.
Over the last month or so, the Fund's approach has ensured that it is somewhat overweight to North America, somewhat underweight to continental Europe and very underweight to Japan. Your Adviser is concerned that global investors fail fully to appreciate the implications for individual stocks of the economic slowdown and structural problems in Japan. Relative to the benchmark MSCI World Index, style bias and tracking error have been reduced. Software group Nvidia and Samsung Electronics are the two stocks that are making the greatest contribution to portfolio risk.
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Investec GS Global Equity comment - March 2002
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Tuesday, 14 May 2002
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Fund Manager Comment
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Most of the world’s stockmarkets rose during March. Typically the best performing stocks were in cyclical sectors and/or were characterised by a reduction in financial risk. Information technology hardware stocks, and most notably semi-conductor suppliers, were especially strong. In spite of the rise in the price of oil, mainly on concerns over the political situation in the Middle East, major energy stocks performed little better than the major stockmarket indices. Emerging markets generally outperformed their developed counterparts. By contrast, defensive areas such as food, food retailing and pharmaceuticals tended to lag. Particular stocks continued to be sold down sharply on concerns that they had used off-balance sheet funding vehicles, and/or aggressive accounting, to boost reported profits.
Notwithstanding the problems of individual stocks in its portfolio, the Fund continued to perform steadily through March. The Fund’s approach, which ensures that its weighting to the various sectors matches that of the benchmark MSCI World Index, and its disciplined stock selection generated superior results. Your Adviser considers that global investors have failed fully to appreciate the implications for individual stocks of the economic slowdown and structural problems in Japan. Accordingly, the Fund remains underweight to that market.
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