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STANLIB Multi-Manager Global Equity Fund - News
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STANLIB Global Equity Comment - Sep 09
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Thursday, 25 February 2010
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Fund Manager Comment
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While the third quarter of 2009 had seen global equities, as represented by the MSCI World index rise by nearly 20%, investors proved far more cautious going into the fourth quarter. For the most part, the factors that lay behind the summer rally remained intact: a steady flow of favourable economic data and good quarterly results from companies. However, doubts about the nature of economic growth gradually appeared. Other latent concerns emerged, and investor nervousness became evident in November, when the standstill agreement requested by Dubai World on part of its debt triggered a violent (albeit short-lived) reaction from equity markets. Despite this, leading indices continued to rise, supported by third quarter company results which proved very positive and more soundly-based than those of the second quarter. Furthermore, the still very accommodative stance of the central banks and the weakness of the US Dollar up to early December, along with the firmness of commodity prices helped keep investor sentiment positive.
The STANLIB Multi Manager Global Equity Fund outperformed the MSCI AC World index by 110 basis points over the fourth quarter of 2009, with a return of 5.7% versus the benchmark return of 4.6%. All five of the underlying managers held outperformed their respective benchmarks, with particularly strong contributions from the aggressive managers, Gartmore and T Rowe Price. Strong stock selection was the key driver of returns for all the managers, but the portfolio particularly benefited from selection and allocation within the Information Technology sector, where several of the managers were also overweight.
The most likely scenario for 201 0 -limited growth that is still dependent on economic policies - still holds good, but the latest economic indicators have given the impression otvigorous activity, especially in the US. In the short term, investor optimism regarding the economic situation is likely to lead them to favour risk assets and especially equities, buoyed as they are by good news on company results and an environment that is still propitious for corporate mergers. After this initial phase, more structural doubts about this recovery will surface (sluggish growth, high unemployment, very weak public finances, possible deflation, etc) and could lead to a return of risk aversion.
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STANLIB 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 equities rallied 17.3% in the 3rd quarter and are now up 26% YTD. This follows a similarly strong Q2 resulting in the largest two-quarter increase since 1975. One of the main factors behind this rally was further evidence highlighting the world would avoid sliding into a depression thanks to successful stimulus packages and demand in Asia. Europe was the best performing region having benefited from better than expected economic statistics, including, amongst others, an emergence from recession in France and Germany. Conversely Japan was the laggard as it fell victim to a whole series of bad economic news coupled with a strong currency, which especially impacted on export companies. Earnings results and better news in the housing market were among positive indicators in Q3. The tone of data did however, start to change somewhat, with fewer upside surprises and more downside surprises versus consensus.
The Fund modestly outperformed the benchmark during the period under review, with a return of 18.1% compared to the index return of 17.9%. While most managers fared well through the earlier part of the quarter, performance proved slightly weaker in September. Overall, Aberdeen and Marathon provided the strongest contribution to out performance. Stock selection proved to have the most significant impact on performance, particularly within the Financials and Consumer Discretionary sectors. Surprisingly, whilst most of the underlying managers were underweight Financials through the period, this did not actually have too significant an impact on relative returns.
As we enter the last quarter of the decade its worth reflecting on the past 10 years. It's been an incredible period of volatility with bubbles and busts everywhere. In years to come we will probably marvel at all that went on. Looking ahead we continue to believe stocks began a cyclical bull market in March. We say a cyclical, rather than secular, bull market because its unlikely equities will reach record highs before the next bear market sets in. Following the 66% rally since the March lows we believe the market is vulnerable to a correction. At the beginning of the year investors were so pessimistic that all that needed to happen for stocks to rally was for the world not to end. The outlook from here is much more heavily dependent upon the strength of the economic recovery and corporate profits.
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STANLIB Global Equity Comment - Sep 08
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Tuesday, 2 December 2008
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Fund Manager Comment
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The MSCI AC World index fell by 16.6% over the quarter in US Dollar terms. Worries about the health of the financial system depressed the global equity markets. Market events unfolded rapidly through the quarter, starting with the bailout of Fannie Mae and Freddie Mac and the spectacular collapse of Lehman Brothers, which was subsequently followed by the collapse (and rescue) of other financial institutions in the US and in other developed markets, namely Europe and the UK. Emerging markets, which had earlier ridden the commodities boom, suffered as commodity prices fell amid concerns that slower economic growth would curb demand. Having initially strengthened in July, the Rand depreciated by 5.3% during the quarter, and more pronounced depreciation has been experienced in October as a result of distressed liquidations by foreigners.
The Fund underperformed its benchmark for the quarter, primarily as a result of its overweight exposure to Emerging Markets. In addition to this, Alliance Bernstein's currency allocation also detracted. The continuing slowdown will probably weigh on equities. Consensus earnings expectations remain too high and there will need to be downward revisions particularly in the financial sector as the de-leveraging process leads to even more write-downs. The US consumer is now under extreme pressure and this is having a negative effect on the global economy. Further rate cuts, together with some stability in the property market, would appear to be the medicine required to address the situation.
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STANLIB Global Equity Comment - Jun 08
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Thursday, 18 September 2008
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Fund Manager Comment
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Following the flight to quality in the first quarter of 2008, global equity markets recovered through April and May as risk aversion receded slightly. But with oil prices hitting record highs towards the end of the quarter, and speculation that central banks might have to raise borrowing costs the stock markets, both developed and emerging, gave up their gains. The MSCI World index fell sharply in June and finished Q2 2008 in negative territory with a fall of 1.7% in US dollar terms. The MSCI AC World index did not fare any better, with a similar return of -1.6%. Sector performance was widely dispersed: energy and industrial commodity companies benefited from still buoyant world demand for raw materials. At the other extreme, finance and housing companies were undermined by the continuing fallout from the credit crisis.
The STANLIB Multi-Manager Global Equity Fund outperformed the MSCI AC World index, having only fallen by 0.3%over the second quarter, with Gartmore and TRowe Price's outperformance outweighing poor performance from Marathon and Bernstein. Stock selection across various sectors was the main driver of outperformance, but the fund also benefited from being underweight the financials sector over the period.
Charting a course for effective economic policy is becoming increasingly difficult for central bankers. In developed markets, adjusting for the winds of recession is causing imbalances as economies are also being buffeted by gusts of inflation. In Asia, even higher inflation may be likened to a gale, and the likely policy responses will leave economies exposed to headwinds that will hold back growth. Indeed, further stretching the analogy, with the current hurricane of a deflating financial bubbles, and another massive deflation possible in commodities, it would be no surprise to see bankers, politicians and the like effectively batten down the hatches and ride out the storm, admitting privately that there is little that can be done.
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STANLIB Global Equity Comment - Mar 08
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Thursday, 10 July 2008
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Fund Manager Comment
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In US dollar terms, the MSCI AC World index fell 9.3% in the first quarter of 2008. In January alone the index fell 8.2% - the worst monthly performance for global developed equity markets in more than five years. Emerging markets and Asia Pacific ex Japan were the worst performing regions, albeit with great disparity between country returns. China (as represented by the Shanghai Composite) was the worst performing market in the region and finished the first quarter down 31%, whereas Taiwan outperformed the other countries with a return of +5.3%.
The Stanlib Global Equity fund gave back some of the outperformance from the previous quarter, having underperformed the benchmark by 180 basis points in Q1 2008. The market correction in January was particularly detrimental for Gartmore as stocks that had performed well in the fourth quarter were sold-off extensively and continued to underperform despite strong fundamentals. Broadly, the portfolio's overweight exposure to the Asia Pacific region also detracted from performance.
The collapse of the financial system is in nobody's interest - a thought not lost on the central banks of the developed world, which have, in varying degrees, thrown liquidity at the problem (notably the Federal Reserve). This has brought the markets back from the brink, but it would be dangerous to think that the deflation of the greatest financial bubble in living memory has run its course, or that there will not be a cost to the real economy. The US authorities are certainly focusing on reflation, with real interest rates negative and fiscal stimulus imminent in an election year. This may well work, but with a delay. In the meantime, unemployment is rising, house prices continue to fall, and it is sensible to believe that, in an indebted nation, there will be a period of retrenchment. There is as yet little evidence of a slowdown in the UK and Europe, but earnings expectations seem too high, whereas growth rates in Asia and emerging markets are still very attractive relative to the western world (with the exception of Japan where fundamentals and technicals remain weak), supported by domestic demand and commodities.
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STANLIB Global Equity Comment - Dec 07
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Tuesday, 11 March 2008
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Fund Manager Comment
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In US dollar terms, the MSCI World Index fell in the fourth quarter, returning -2.3%. Emerging markets generally did not fare much better, with the MSCI AC World also finishing the quarter in negative territory with a return of -1.7%.
The Portfolio outperformed the MSCI World index by 290 basis points over the quarter. The two new managers, Gartmore and T Rowe Price performed particularly well since they were introduced to the portfolio at the end of the previous quarter. Their stock selection, mainly in the Telecoms and Financials sectors were key contributors to outperformance. The portfolio's overweight exposure to emerging markets also added value during the quarter.
The potential impact of the deflating of the financial bubble is serious, notably for an indebted Western World. Indeed, it is serious enough for central banks to cut interest rates and inject liquidity into a backdrop that would, under normal circumstances, require tighter controls, given the ever-increasingly inflationary environment. If the central banks fail in their efforts to kick-start lending and normalise the banking system, then this financial problem will become a real one and recession will ensue. A recession in the US and Europe will unavoidably impact China and the rest of the emerging world. We believe that the US will (just about) avoid recession, and, ultimately, the liquidity required may well store up future problems such as inflation. With recession avoided, the emerging markets will have further to run - especially assets related to the command economy of China, whose leaders will not wish the eyes of the world to be on a country in crisis in 2008.
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STANLIB Global Equity Comment - Sep 07
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Tuesday, 11 March 2008
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Fund Manager Comment
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Sub prime concerns & risk aversion encouraged a flight to safety in the 3rd quarter, with volatility rising dramatically as the VIX climbed to its highest level in 4 years. By mid August the MSCI had fallen 8% but the subsequent rally has been re-assuring, although the magnitude of strength did take us by surprise. In this regard the index rebounded 11.2% from its intra month low to end the quarter in positive territory (USD +2.5%) and bringing the YTD gains to 11.7%. The greater than expected rate cut by the Fed, coupled with a consensus view that rates globally have peaked ignited the rally.
The portfolio out performed its benchmark by 0.4% for the quarter and 1.2% over 12 months. Out performance YTD can be attributed to our overweight position in growth stocks (USD +15.2%), which are rebounding against their value counterparts (USD +9.2%). Within developed markets Asia continued to offer the best returns during the period under review followed by the US, Europe and then Japan. Our overweight position in Asia therefore added alpha as did our underweight position in the US. Conversely the tilt to Europe detracted from returns. Dollar returns (+3%) were diluted by the strength of the rand, which was up 2.6% against the greenback. The only changes during the period under review were the introduction of Gartmore and T Rowe Price at the expense of Capital International and ACM who continued to be a drag on performance.
As we enter the 4th quarter, we retain our positive outlook for shares. In addition to their favourable valuation, we believe the environment favours them due to rising liquidity & strong balance sheets. The shrinking equity float as a result of record share buy backs and declining new issuance reinforces this view. Clearly the risk of complacency amongst investors & corporate earnings surprising on the downside are concerns, while a correction is also possible as the current bull market (MSCI 170% over 260 weeks) exceeds the median duration (123 weeks) & magnitude (57%) of the past 8 cycles.
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STANLIB Global Equity Comment - Jun 07
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Wednesday, 26 September 2007
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Fund Manager Comment
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The Global Equity Fund out performed its benchmark by 30 basis points for the quarter & 1.1% over 12 months. Performance can largely be attributable to Marathon who gained 8.8% in Q2 vs. the MSCI, which was up 6.5%. On the downside Alliance Bernstein, a large cap growth manager, continued to disappoint especially given the fact that growth stocks led the market during the period under review. Overall the portfolio has been tilted toward large cap growth shares. Fundamentally we believe they are offering better relative value & tend to display more defensive & higher quality characteristics in periods of slowing earnings growth.
The 2nd quarter saw continued gains in all major equity markets as evidence of the global economy surprising on the upside coupled with investors' persistent appetite for risk supported equities. We still believe the micro & macro environment favours equities due to attractive valuations, rising liquidity & strong balance sheets. The shrinking equity float as a result of record M&A activity, share buy backs & declining new issuance reinforces this view. While relative valuations have retreated on the back of a rout in bond markets they remain supportive (earnings yields still above bonds). Clearly the risk of complacency amongst investors & corporate earnings surprising on the downside are concerns, while a correction is also possible as the current bull market (MSCI 153% over 247 weeks) exceeds the median duration (123 weeks) & magnitude (57%) of the past 8 cycles. We remain convinced that the fund's positioning is appropriate for the prevailing market conditions; consequently no changes were made to the underlying managers.
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STANLIB Global Equity Comment - Mar 07
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Tuesday, 29 May 2007
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Fund Manager Comment
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The portfolio is multi managed. We have three under lying managers. One value, one growth and one style rotator.
The Global Equity funds' portfolio has been tilted toward large cap growth shares. Fundamentally we believe that these shares are offering better relative value and tend to display more defensive and higher quality characteristics in periods of slowing earnings per share growth. We believe that large caps are offering better relative value than mid and small caps.
The past quarter saw continued gains in all major equity markets. This followed a good third and fourth quarter last year. The equity market started the year in much the same way it ended 2006, by rallying strongly. The late February / early March correction took the year to date performance into negative territory. It rallied strongly from then to end the quarter at another all time high. The equity drivers remain the same; reasonable valuations, positive earnings growth and ever continuing M&A activity. The US economic data released during the month confirmed the trends of a strongish consumer, slowing to flat growth in manufacturing and a recession in the housing sector. We believe that as US interest rates start to decline in latter part of the year, there will be some PE expansion. This will be supportive for equity markets.
No changes were made to any of the underlying managers during the quarter. The performance of the underlying managers has been mixed. The growth manager has disappointed this past year underperforming the benchmark. So too has the performance of Capital International, the style rotator. The value manager, Marathon, continues to do well. We remain convinced that the fund's positioning is appropriate for the prevailing market conditions.
The performance of this fund has been reasonable over all periods.
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STANLIB Global Equity Comment - Dec 06
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Wednesday, 14 March 2007
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Fund Manager Comment
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The portfolio is multi managed. We have three under lying managers. One value, one growth and one style rotator.
The Global Equity funds' portfolio has been tilted toward large cap growth shares. Fundamentally we believe that these shares are offering better relative value and tend to display more defensive and higher quality characteristics in periods of slowing earnings per share growth. We believe that large caps are offering better relative value than small caps.
The past quarter saw continued gains in all equity market. This followed a good third quarter which was characterized by the Federal Reserve's decision to leave the Fed Funds target rate unchanged, after 17 consecutive increases. This contributed to a rally in equity markets, which was fuelled by easing inflation concerns as the oil price rapidly declined from its early August peak. We are optimistic on the outlook for global equity markets this year. Earnings will continue to grow, albeit at a slower rate than last year, and with reasonable equity valuations, which are below there long term mean, we believe these two factors will support the market this year. We also believe that as US interest rates start to decline there will be some PE expansion. This too will be supportive for equity markets.
No changes were made to either the geographic allocations of the Fund or to any of the underlying managers during quarter. Performance from the underlying funds has been mixed, as certain of the underlying managers have produced extremely disappointing performance. The largest culprits were ACM in the Global Equity Fund, Loomis Sayles in the North American Equity Fund and Legg Mason and JP Morgan in the Asia Pacific Equity Fund. Further impacting on performance was the fact that the Fund's tilt to large capitalisation growth managers was made too early. We remain convinced, however, that this positioning is appropriate for the prevailing market conditions.
The performance of this fund has been reasonable over all periods.
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STANLIB Global Equity Comment - Sep 06
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Tuesday, 28 November 2006
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Fund Manager Comment
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The portfolio is multi managed. We have three under lying managers. One value, one growth and one style rotator.
The Global Equity funds' portfolio has been tilted toward large cap growth shares. Fundamentally we believe that these shares are offering better relative value and tend to display more defensive and higher quality characteristics in periods of slowing earnings per share growth. We believe that large caps are offering better relative value than small caps.
The past quarter was characterized by the Federal Reserve's decision to leave the Fed Funds target rate unchanged, after 17 consecutive increases. This contributed to a rally in equity markets, which was fuelled by easing inflation concerns as the oil price rapidly declined from its early August peak. Prospects for the remainder of the year remain murky. Internationally, and particularly in the USA, the positive prospects of declining interest rates and reasonable equity valuations are offset to a degree by potentially slowing corporate earnings. Our belief remains that this is the environment in which large market capitalisation growth stocks are likely to come to the fore.
No changes were made to either the geographic allocations of the Fund or to any of the underlying managers during quarter. Performance from the underlying funds has been mixed, as certain of the underlying managers have produced extremely disappointing performance. The largest culprits were ACM in the Global Equity Fund, Loomis Sayles in the North American Equity Fund and Legg Mason and JP Morgan in the Asia Pacific Equity Fund. Further impacting on performance was the fact that the Fund's tilt to large capitalisation growth managers was made too early. We remain convinced, however, that this positioning is appropriate for the prevailing market conditions.
The performance of this fund has been reasonable over all periods.
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STANLIB Global Equity Comment - Jun 06
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Wednesday, 30 August 2006
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Fund Manager Comment
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The portfolio is multi managed. We have three under lying managers. One value, one growth and one style rotator. We have tilted the portfolio toward large cap growth Shares. Fundamentally we believe that these shares are offering better relative value and tend to display a more defensive and certain characteristics in periods of slowing earnings per share growth. We believe that large caps are offering better relative value than small caps. We believe that the outlook for equity markets is neutral to marginally positive. Higher global interest rates and oil prices have yet to have a meaningful effect on economies and corporate earnings growth. America is showing some signs of an economic slowdown. Contrary to this though is that valuations are reasonable relative to history and other asset classes. The performance of this fund has been reasonable over all periods.
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