Note: Given this fund’s objective, the manager recommends a minimum time horizon of two years for it to achieve its strategic objective.

The H4 Stable Fund (‘the fund’) gained 1.9% during Q3-2019, and has delivered 8.9% versus 6.3% for its SA CPI +2% p.a. benchmark over the past 12 months. In terms of the major asset classes to which the fund was exposed during the quarter, the local equity market (measured by the FTSE/JSE All Share Index) was down 4.6%, outperforming the FTSE/JSE Capped Top 40 Index (to which the fund is exposed) which lost 6.1%. Local bond prices (All Bond Index) gained 0.8% during this risk-off phase in global financial markets; while the local listed property market (FTSE/JSE SA Listed Property Index) ended down 4.4%. Global equities (MSCI All Country World Index in US dollars) ended the quarter flat, while global listed property (MSCI World REITs Index in US dollars) gained a stellar 6.2% on the back of a further decline in global bond yields amid concerns about the global economic growth outlook. During the quarter the US dollar strengthened 7.5% versus the rand; supporting the performance of global assets when measured in rand terms.

There were no marked asset allocation changes in the fund in recent months. However, the manager took some profits on South African preference shares, while net inflows were used to marginally increase the fund’s offshore exposure and to top up the SA enhanced cash and SA protected equity holdings. In terms of foreign currency exposure, the manager initiated a new zero cost currency hedge during August on a portion of the fund’s offshore exposure in order to protect it from possible marked rand strength. This protection is in place until mid-December 2019. At quarter-end, the fund held a diversified mix of assets which the manager deems appropriate for the current investment climate. Sizeable asset class exposures included domestic money market and enhanced cash, local and (limited) global government bonds, domestic and global equity, domestic and US protected equity, South African preference shares, as well as limited exposure to global and domestic listed property.
The fund continues to adhere to its policy.

Note: Given this fund’s objective, the manager recommends a minimum time horizon of two years for it to achieve its strategic objective.

The H4 Stable Fund (‘the fund’) gained 3% during Q2-2019, and has delivered 9.2% versus 6.6% for its SA CPI +2% 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 3.9%, lagging the FTSE/JSE Capped Top 40 Index (to which the fund is exposed) which delivered 4.9%. Local bond prices (All Bond Index) increased by 3.7%, while the local listed property market (FTSE/JSE SA Listed Property Index) ended up 4.5%. Global equities (MSCI All Country World Index in US dollars) was up 3.6%, while global listed property (MSCI World REITs Index in US dollars) gained 2.2%. During the quarter, the rand strengthened 2.3% versus the US dollar; suppressing the performance of global assets when measured in rand terms.

In recent months the manager allocated net inflows towards SA enhanced cash, while also topping up the fund’s exposure to SA and US protected equity. At quarter-end, the fund held a diversified mix of assets which the manager deems appropriate for the current investment climate. Sizeable asset class exposures included domestic money market and enhanced cash, local and (limited) global government bonds, domestic and global equity, domestic and US protected equity, South African preference shares, as well as limited exposure to global and domestic listed property.

The fund continues to adhere to its policy.