The H4 Diversified Fund ('the fund') gained 2.2% during Q3-2018, and has delivered 7.1% over the past 12 months. In terms of the asset classes to which the fund was exposed during the quarter, the local equity market (measured by the FTSE/JSE All Share Index) lost 2.2%, underperforming the FTSE/JSE Capped Top 40 Index (to which the fund is exposed) which fell 1.1%. Local bonds (measured by the All Bond Index) gained 0.8% during the quarter, while the local listed property market (measured by the FTSE/JSE SA Listed Property Index) slipped 1%. Global equities (measured by the MSCI All Country World Index in US dollars) gained 4.3%, while global listed property (measured by the MSCI World REITs Index in US dollars) delivered 0.2%. During the quarter, the US dollar strengthened 3.2% versus the rand, contributing to the performance of global assets when measured in rand terms.

One of the stated primary objectives of the fund is to achieve capital appreciation over the medium term, at a risk level roughly half that of a pure equity investment. When measured over the past one and three year periods, the fund's standard deviation (which is a generally accepted measure of risk/volatility) was 8.7% and 7% respectively. This compares reasonably well with the local equity market's standard deviation of 11.2% over one year and 11.4% over three years, and global equity measured in rand's standard deviation of 22.8% over one year and 23.1% over three years.

During the third quarter, the manager entered into additional zero-cost ZAR/USD option structures to protect roughly 75% of the fund's non-SA exposure against possible significant rand strength to mid-March 2019. During the quarter, the manager also increased the US protected equity allocation and SA bond exposure, while some profit was taken from the global equity allocation.

At quarter-end, the fund held a diversified mix of assets which the manager deems appropriate for the current investment climate. Sizeable exposures included domestic bonds, domestic and global equity, domestic and US protected equity, global listed property, South African preference shares and domestic listed property.

The fund continues to adhere to its policy.

The H4 Diversified Fund ('the fund') gained 7.2% during Q2-2018, and has delivered 11.5% versus 9% for its SA CPI +4% p.a. benchmark over the past 12 months. In terms of the asset classes to which the fund was exposed during the quarter, the local equity market (measured by the FTSE/JSE All Share Index) gained 4.5%, marginally outperforming the FTSE/JSE Capped Top 40 Index (to which the fund is exposed) which increased by 4%. Local bonds (measured by the All Bond Index) declined 3.8% along with the local listed property market (measured by the FTSE/JSE SA Listed Property Index) which fell 2.2% during the quarter. Global equities (measured by the MSCI All Country World Index in US dollars) ended the quarter up 0.5%, while global listed property (measured by the MSCI World REITs Index in US dollars) rose 4.9%, continuing its rebound after a challenging start to the year. During the quarter, the US dollar strengthened 15.7% versus the rand, adding to the performance of global assets when measured in rand terms.

One of the stated primary objectives of the fund is to achieve capital appreciation over the medium term, at a risk level roughly half that of a pure equity investment. When measured over the past one and three year periods, the fund's standard deviation (which is a generally accepted measure of risk/volatility) was 8.5% and 6.8% respectively. This compares reasonably well with the local equity market's standard deviation of 12.6% over one year and 11.3% over three years, and global equity measured in rand's standard deviation of 18.7% over one year and 21.9% over three years.

During the quarter, the manager started to gradually increase the fund's local bond exposure at more attractive yields; given the recent sell-off in the asset class. There were also increases in the local listed property and global equity allocations as valuations have improved; with a subsequent reduction in local protected equity. During June, the manager entered into zero cost ZAR/USD option structures to protect about half of the fund's non-SA exposure against possible significant rand strength to mid-December 2018.

At quarter-end, the fund held a diversified mix of assets which the manager deems appropriate for the current investment climate. Sizeable exposures included domestic bonds, domestic and global equity, domestic and US protected equity, global listed property, South African preference shares and domestic listed property.

The fund continues to adhere to its policy.