The fund returned 1.5% this quarter. Year to date the fund has returned 5.6%. The fund performance this quarter resulted from good performance from our global stocks and exposure to money market instruments, preference shares and property. Hedging into a strongly rising equity market dampened performance somewhat. The fund has returned 8.4% per annum since its inception in 2011.

Global economic backdrop

Meaningful and synchronized improvement in global growth has continued this quarter. Business sentiment indicators remain very strong with improvements seen this quarter across emerging markets. Global capital expenditure and trade volumes have picked up from the low levels of recent years, but may improve further if growth continues.

Developed market consumer sentiment has increased materially in 2017, although it not yet filtering into accelerating consumer spend. Headline inflation rates across the world have generally increased this year due to increases in food and energy inputs; however core inflation (stripping out these volatile food and energy effects) remains benign.

In the US, this quarter's economic performance has been materially affected by weather-related disruptions (hurricanes Harvey and Irma). Looking through these distortions, real time activity indicators show that economic growth has continued at recent run rates. Acceleration in growth now requires implementation of well-signaled corporate tax cuts, and a pick-up in business investment. Such investment has improved, but is far lower than expected given very healthy corporate profit margins, favorable borrowing conditions, and strong business sentiment.

In both Europe and Japan, GDP growth has accelerated moderately over the year and leading indicators suggest further momentum into 2018. Strong right wing electoral support in Germany and the Catalonia referendum has not dampened EU business confidence (latest manufacturing confidence readings at seven-year highs). Loan growth, though gradually increasing, is still exceptionally low versus history and remains a major inhibitor to a more robust recovery. In Japan, the labour market remains extremely tight (there are 48% more open jobs than applicants - a 27-year high). Despite as yet absent wage inflation, increased Japanese job numbers and robust consumer confidence is leading to sustained 2% plus consumption growth.

Emerging market economies have shown good momentum into 2017, with recovering business confidence in many markets (India, Indonesia, and Brazil in particular), increased exports due to improvements in global trade, generally improving trade balances, and positive outlooks for business investment. There has been a marked increase in capital flows into emerging markets which, via currency strength, is having a dampening effect on the inflation and interest rate outlooks across emerging markets. China has benefited from the positive global backdrop - showing a strong recovery in exports this year. Excessively high levels of credit growth have been somewhat reigned in and the health of the property market seems to have improved. With credit growth slowing after a period of rapid expansion, Chinese economic activity is likely to slow from current levels.

South African economic backdrop

The local economic outlook remains weak as confidence remains damaged by the actions of government and continuous news of rampant corruption in the public sector. Investment has contracted and household consumption growth has slowed to a crawl. State owned enterprises continue to be generally mismanaged, the mining sector faces a huge threat from a poorly constructed new Mining Charter and there have been signs of the hollowing out of experience within the National Treasury. Against a very favourable global growth backdrop, South Africa's growth outlook is expected to remain one of weakest amongst emerging markets. Of concern is the deteriorating health of the national fiscus, with very low growth, escalating pressure from state owned enterprises, and a worrying decrease in tax collection efficiency. Given these medium-term challenges, further rating downgrades are expected.

The outcome of the ANC elective conference in December will be very important in determining the direction of future policy and the government's capacity to effectively implement it - and hence long-term growth prospects.

Market review

For a number of years, extreme unconventional monetary stimulus in the form of price agnostic asset purchases has distorted asset prices across the globe. Bond yields remain very low, corporate bond credit spreads are extremely suppressed, and equity prices are high, especially in sectors where stable cashflows are generated (such as consumer staples) and where growth prospects are well appreciated (such as the large global technology companies). Global bond rates have risen somewhat since the second of half of 2016 from record low levels, accompanied by a welcome rise in inflation expectations. These changes in trends, which should continue as monetary conditions begin to normalise, are causing welcome increased dispersion across equities, as well as across asset classes - and are bringing about a better environment for stock pickers.

Over the quarter, developed equity markets were yet again strong across the board in dollar terms. Hong Kong (up 8.5%), Germany (up 7.7%) and France (up 7.8%) were again the outperformers. Emerging markets were also strong (up 8.0% in dollar terms).

The local equity market was also strong over the quarter (up 8.9%). Resources (up 17.7%) outperformed this quarter, with Anglo American and BHP Billiton contributing materially (up 42.2% and 22.2% respectively). Other strong performers were Kumba Iron Ore (up 39.8%) and African Rainbow Minerals (up 28.9%).

Industrials were also strong (up 8.3%), with heavyweights Naspers (up 15.0%) and Richemont (up 16%) contributing significantly, while British American Tobacco (down 4.2%) lagged. Telecommunication company performance was mixed. With the exception of Pick n Pay (down 2.4%) and Woolworths (flat), retailers were stronger after the weak previous quarter. Food producers were again weak this quarter (down 1%).

Financials were stronger this quarter, with insurers and banks also strong. Standard Bank (up 12.3%) and FirstRand (up 10.3%) outperformed, while Nedbank and Barclays Africa (both flat) continued to lag.

After a surprise July rate cut, and then a pause by the SARB, market expectations are for no further cuts this year. Currency strength and a lower oil price is dampening inflationary expectations, but this is counterbalanced by the poor structural state of the economy which increases the likelihood of further ratings downgrades, which may lead to currency weakness and higher inflation.

Fund performance and positioning

Our exposure to yield asset classes (money market instruments, preference shares and local property) contributed meaningfully. Equites Property Fund, a local specialist industrial REIT, was a key contributor (up 19.7% for the quarter and 39.3% year to date). A strong performance from our global stocks contributed positively again this quarter.

Strong contributors this quarter were Naspers, our global stocks, African Rainbow Minerals, Northam Platinum and Old Mutual. Key detractors were Clover, Master Drilling, AECI and Datatec.

Our global holdings contributed meaningfully to performance again this quarter. Strong contributors were online luxury retailer Yoox Net-a-Porter, insurers (Just Group, Cigna and Prudential) and specialist chemical producers (Wacker Chemie and Ingevity). Detractors were Spire Healthcare and Brookdale Senior Living.

Against a global backdrop of improving economic growth, high asset prices, rising political uncertainty in many countries, and a potentially disruptive Chinese economic rebalancing, we are guarded on the outlook for financial markets. However, we are optimistic that more normal financial conditions (in particular higher real rates, inflation and levels of risk-taking) are proving to be a better environment for stock picking. The outlook for the South African economy is negatively skewed both in the short and medium term and we are appropriately positioned. We retain very high exposure to global holdings, and local mid-cap stocks where we see compelling stock-specific growth vectors coupled with low market valuations. We continue to hold positions in lower-cost platinum group metals miners.

We maintain a hedge against a large part of our equity exposure and maintain some exposure to foreign equities and select local property stocks. We have a large exposure to preference shares and short-term credit instruments.

The fund returned 3.7% for the quarter, ranked 2nd in the ASISA MA Low Equity category (and was also ranked 2nd over one year with a return of 12.6%). This performance resulted from strong local selection in our high conviction mid cap holdings and property stocks and moderate exposure to global equity holdings. The fund has returned 8.8% per annum since its inception in 2011.

Global economic backdrop

Global growth remains low, but the outlook has improved as evidenced by a further pickup in a broad array of sentiment indicators globally. So far, there has been only modest evidence of any follow through of positive sentiment into real activity, and business investment spending in particular remains lacklustre. Importantly, inflation expectations have picked up meaningfully from very low levels.

In the US, consumer and business confidence has remained extremely high post the elections. There is strong evidence of a tightening labour market, which should start feeding through into higher wage increases, with positive knock-on effects for consumption expenditure. Modest recoveries in capital spend and industrial production seems to be largely due the cyclical recovery in the oil and gas market, and expectations are high for a more broad-based rebound. President Trump has been slow to deliver on promised reforms and expansionary fiscal policy, but appears to be softening his stance on protectionism.

European growth remains slow, with the exception of Germany, Spain and Ireland, which seem to be accelerating modestly. Importantly, sentiment has improved despite an uncertain political backdrop with many key economies facing important polls in coming months and the Brexit negotiations looming.

In China, significant fiscal stimulus continues to support fixed asset investment and therefore buoy GDP growth. The stimulus has thus far been effective, providing a much improved backdrop for commodity demand. We are concerned that in the short term, a slowdown of the very buoyant property market will dampen some of the construction-led growth, and that in the medium term, the associated debt build-up makes the current economic path unsustainable.

Emerging market economies have shown good growth into 2017 so far, with Latin America swinging from contraction to reasonable growth, and South Korea, Russia and India accelerating.

South African economic backdrop

The South African economy remains weak, although improving slightly in 2017 due recoveries in agriculture and mining. Recovery expectations are further aided by a much improved inflation and interest rate outlook over the last year due to a recovery in the currency. However, it is clear that a more meaningful improvement will need increased private sector confidence and investment. This is unlikely, due to high policy uncertainty and lack of meaningful growth enabling reforms.

The dramatic events of late March, in particular the very negative leadership changes within the National Treasury, have added significantly to policy uncertainty and have materially eroded the previously high levels of investor confidence in this key institution. The subsequent foreign currency rating downgrades were therefore to be expected and further downgrades are likely if the economy continues to be weak.

These political events will, in the short term, further negatively affect business and consumer confidence. Any further currency weakness from this point is likely to negatively impact the inflation and interest rate outlook. More importantly, the medium-term economic outlook depends critically on political developments - in particular the leadership battles within the ruling party.

Market review

Extreme unconventional monetary stimulus in the form of price agnostic asset purchases has distorted asset prices across the globe for a number of years. Bond yields remain very low, and equity prices are generally high, especially in sectors where stable cashflows are generated, such as consumer staples. Global bond rates have risen somewhat since the second of half of 2016 from record low levels, accompanied by a welcome rise in inflation expectations. These changes in trends, accompanied by increased event-driven market volatility (internationally and locally) is causing welcome increased dispersion across equities, as well as across asset classes - a better environment for stock pickers.

Over the quarter, developed equity markets were strong across the board in dollar terms. Hong Kong (up 9.9%), Germany (up 8.8%) and the French market (up 7.1%) were the outperformers. Emerging markets were also very strong (up 11.5% in dollar terms).

The local equity market gained 3.8% over the quarter resulting in a one year return of just 2.5%. Industrials (up 7.1%) outperformed this quarter, with material contributions from index heavyweights (Richemont up 16.8%, British American Tobacco up 15.8%, and Naspers up 14.9%). Food producers were strong (RCL foods up 18.1% and Pioneer foods up 16.5%), as were most of the retailers (Shoprite up 13.9%, Clicks up 12.7%). The healthcare sector (hospital groups and pharmaceutical stocks) came under pressure (healthcare sector was down 7%).

The basic materials sector was positive this quarter (up 2.7%). Outperformers were Exxaro (up 31.7%), Kumba Iron Ore (up 27.6%) and Northam Platinum (up 26.9%). Financials (down 1.9%) underperformed. Bank stock performances were unusually dispersed, with Barclays Africa down 17.3%, FirstRand down 10.7%, Standard Bank down 2.5% and Nedbank up 1.4%. Insurers were generally positive.

The repo rate was unchanged this quarter (7%) but there was considerable inter-quarter movement in forward expectations. Prior to the political disruption at the end of March, the improving inflationary backdrop (primarily due to a strengthening currency) led to market expectations that the rate cycle would begin to turn this year and interest rate cuts later in the year. This situation has now reversed, and the market is now less optimistic on rate changes.

Fund performance and positioning

Strong contributors this quarter were Naspers, our global stocks, and a number of our high conviction mid-cap stocks (Northam Platinum, AECI, Master Drilling and Metair). Key detractors were FirstRand and Sun International, as well as African Rainbow Minerals and Tongaat Hulett (both of which were strong performers in 2016).

In addition to strong equity stock selection our holdings in select local property stocks also added to performance this quarter. Cash, preference shares and commodity ETFs also added moderately. Given the negative economic developments locally, and our assessment that the risks of fiscal deterioration are now materially higher, we consequently have no government bonds exposure, favouring shorter-duration credit instruments and cash instead. Hedging activities detracted marginally this quarter.

The strong rise in global stock markets, together with stock selection meant a meaningfully positive contribution from our global holdings. Strong contributors included insurer Esure and related price comparison company Gocompare.com, as well as Chinese ecommerce company JD.com.

Against a global backdrop of gradually improving global economic growth indicators, high asset prices, rising political uncertainty in many countries, and a potentially disruptive Chinese economic rebalancing, we are guarded on the outlook for financial markets. However, we are cautiously optimistic that financial conditions may have now begun to normalise (in particular higher real rates, inflation and levels of risk-taking), and that there are attractive stock picking opportunities. The outlook for the South African economy is negatively skewed both in the short and medium term and we are appropriately positioned. We retain very high exposure to global holdings, local mid-cap stocks where we see compelling stock specific drivers and low market valuations. We continue to hold positions in the low-cost PGM miners and certain PGM ETFs.

We maintain a hedge against a large part of our South African equity exposure and maintain some exposure to foreign equities and select local property. We have a large exposure to cash, preference shares, and short-term credit instruments.

The fund returned 0.3% this quarter, consolidating after a very strong run. Over a one-year period, the fund has returned 8.3% and was ranked second in its category. The fund performance this quarter resulted from good performance from our global stocks, and exposure to money market instruments, preference shares and property. The fund has returned 8.5% per annum since its inception in 2011.

Global economic backdrop

There has been a fairly meaningful and synchronised improvement in global growth in 2017. Sentiment indicators remain positive, and there are now early signs that business investment is improving. Although inflation rates across the world have generally increased this year, developed market core inflation (stripping out the effect of food and energy prices) remains weak.

In the US, consumer and business confidence remain high and private sector investment is slowly picking up. Despite a tightening labour market, there haven't yet been meaningful wage increases - a critical lever for meaningful consumption growth. The implementation of well signalled corporate tax cuts is needed to prevent confidence retreating.

European business confidence has picked up materially over the quarter, and is being followed up by marked improvements in industrial production and retail sales. Political risk has declined following the election of a new centrist government in France. Despite an improving backdrop, GDP growth is expected to be only moderately better this year. Japanese GDP growth is moderately stronger this year with much improved business confidence, particularly relating to capital expenditure plans.

Emerging market economies have shown good growth in 2017 so far, with increased exports and generally improving trade balances due to the synchronised global recovery. There has also been a marked increase of capital flows into emerging markets. China's central bank has tightened monetary policy this year, somewhat reigning in excessively high levels of credit growth. With credit growth slowing after a period of rapid expansion, and debt servicing costs rising, Chinese economic activity is likely to slow from current levels.

South African economic backdrop

The local economic outlook has worsened over the quarter as confidence has been dented by the actions of government and continuous news of rampant corruption in the public sector. The cyclical rebounds in agriculture and mining have not been enough to offset weakness in consumption and manufacturing sectors. State owned enterprises continue to be generally mismanaged, the mining sector faces a huge threat from a poorly constructed new Mining Charter and rhetoric emerging that suggests tampering with the independence of the Reserve Bank. This environment ensures that business confidence, and the private sector's appetite for investment that is necessary to create growth, is severely supressed. A positive is that strong, broad-based emerging market inflows are supporting the rand and, together with a weak oil price, are dampening inflation and creating room for moderate interest rate cuts.

The outcome of the ANC elective conference in December will be very important in determining the direction of future policy and the government's capacity to effectively implement it, and hence medium-term growth prospects.

Market review

For a number of years, extreme unconventional monetary stimulus in the form of price agnostic asset purchases have distorted asset prices across the globe. Bond yields remain very low, and equity prices are generally high, especially in sectors where stable cashflows are generated (such as consumer staples) and where growth prospects are well appreciated (such as the large global technology companies). Global bond rates have risen somewhat since the second of half of 2016 from record low levels, accompanied by a welcome rise in inflation expectations. These changes in trends, accompanied by increased event-driven market volatility (internationally and locally) is causing welcome increased dispersion across equities, as well as across asset classes - and is bringing about a better environment for stock pickers.

Over the quarter, developed equity markets were again strong across the board in dollar terms. Hong Kong (up 8%), Germany (up 6.8%) and France (up 9.2%) were again the outperformers. Emerging markets were also strong (up 6.4% in dollar terms).

The local equity market lost 0.4% over the quarter resulting in a low one-year return of 1.7%. Industrials (up 3.4 %) outperformed again this quarter, with Naspers contributing materially (up 9.9%). Other heavyweight global constituents were also moderately positive (Richemont up 2% and British American Tobacco up 1.4%). Telecommunication company performance was mixed. With the exception of Shoprite (up 3.0%), retailers were materially weaker (Massmart down 22.5%, Truworths down 17.4%, Woolworths down 11.8%, Pick 'n Pay down 9.1%). Food producers were also weak (index down 8.3%).

The basic materials sector was negative this quarter (down 7%). Underperformers were Harmony (down 34%), Northam (down 21% and reversing the previous quarter's gain), Sibanye (down 19%), Impala (down 19%), and Anglo American (down 14%).

Financials were flat this quarter (up 0.3%). Insurers were generally weaker (life insurance index down 1.8% and non-life insurance index down 6%). Banks were very mixed. Capitec (up 10%) Barclays Africa (up 7%) and Investec (up 6.2%) outperformed, whilst Nedbank (down 11%) lagged. Local property counters were on average moderately higher (index up 0.9%) as were UK property stocks (Capital & Counties up 4%, Hammerson up 2.6%, and Intu Properties up 1%).

The repo rate remained unchanged this quarter (7%). Currency strength and a lower oil price is dampening inflationary expectations, and the market is now pricing moderate rate cuts (0.25%) six months from now. This outcome will be dependent on political developments in the coming months and the consequent impact on the rand.

Fund performance and positioning

Our exposure to yield asset classes (money market instruments, preference shares and local property) contributed meaningfully. A strong performance from our global stocks also contributed positively. Local equities were a marginal detractor from performance.

Strong contributors this quarter were Naspers and Datatec. Key detractors were Northam Platinum, African Rainbow Minerals and Metair.

Another strong rise in global stock markets, together with good stock selection, meant a meaningfully positive contribution from our global holdings despite a stronger currency. As in the prior quarter, strong contributors were insurer Esure (up 49.7% year to date), insurance price comparison company Gocompare.com (up 49% year to date) and Chinese ecommerce company JD.com (up 54% year to date). Global pharmaceutical company Novo Nordisk was also a strong contributor.

Against a global backdrop of improving economic growth, high asset prices, rising political uncertainty in many countries, and a potentially disruptive Chinese economic rebalancing, we are guarded on the outlook for financial markets. However, we are optimistic that more normal financial conditions (in particular higher real rates, inflation and levels of risk-taking) are proving to be a better environment for stock picking. The outlook for the South African economy is negatively skewed both in the short and medium term and we are appropriately positioned. We retain very high exposure to global holdings, local mid-cap stocks where we see compelling stock-specific growth vectors coupled with low market valuations. We continue to hold positions in lower-cost platinum group metals miners and certain platinum group metals ETFs.

We maintain a hedge against a large part of our equity exposure and maintain some exposure to foreign equities and select local property stocks. We have a large exposure to preference shares and short-term credit instruments.

The fund returned an exceptionally strong 15.2% for the year and was the top performing fund in 2016 in its ASISA category. The performance resulted from successful tactical asset allocation, a strong performance from our highest conviction equity and listed property ideas, hedging activity and exposure to preference shares. Although our foreign stock selection has been very pleasing this year, the stronger local currency has meant that our offshore allocation has detracted moderately. The fund has returned 8.5% per annum since inception in 2011, substantially ahead of both cash and inflation.

Economic backdrop

Extreme unconventional monetary stimulus following the financial crisis was helpful in combating systemic financial stability risks during the initial acute phase, but has proven unsuccessful in the recovery phase. Global real growth has remained pedestrian, inflation is stubbornly low, and confidence to invest in the real economy (via capital expenditure) has not recovered.

US policy risk is high following the US election result. In particular; protectionist trade measures could counterbalance the benefits of fiscal stimulus, a looser regulatory environment and tax cuts. However, the potential disruption of the current monetary-policy dominated status quo is welcomed. Improved confidence could finally lead to higher levels of US and global growth through increased risk-taking and investment. This, in turn, should lead to higher inflation and normalising interest rates.

European growth remained anaemic during 2016. Better growth in Germany and Spain - led by consumer and export strength - was offset by weak growth in Italy and France, where employment growth and business confidence remains sluggish.

In China, significant fiscal stimulus is supporting fixed asset investment and therefore buoying GDP growth. In the short term, the stimulus has been effective, with industrial activity, inflation, and sentiment indicators improving over the course of 2016, providing a much improved backdrop for commodity demand.

In South Africa, economic growth remains very weak and is expected to improve only moderately in the medium term, as the agriculture and mining sectors recover from low levels. The exchange rate, which remains very sensitive to political developments, has recovered significantly in 2016 from oversold levels. This has improved inflation expectations and the interest rate outlook, offering some relief to a subdued consumer. Unfortunately, much of this respite will be offset by expected increases in consumer taxes.

In our view, South African private sector investment - which has been declining in real terms since 2014 - is the key to unlocking higher growth and employment and is unlikely to recover unless there is meaningful improvement in the political backdrop (policy certainty and growth-enabling reforms are required). This improvement is also necessary to protect the sovereign credit rating, which agencies will review again in June 2017.

Market review

The repo rate increased by 75 basis points in the first quarter of 2016 as the Reserve Bank responded to signs of increased inflation pressures. After rising by a cumulative 200 basis points this cycle (from December 2013), rates have now likely peaked.

Extreme unconventional monetary stimulus in the form of price agnostic asset purchases has distorted asset prices across the globe. Bond yields are very low, and equity prices are high, especially in sectors where stable cashflows are generated, such as consumer staples. Global bond rates rose somewhat during the second of half of 2016 from record low levels, accompanied by a welcome rise in inflation expectations. This change in trend has seen over-priced defensive stocks and bonds start to meaningfully underperform.

Over the quarter, developed equity markets were mixed in dollar terms, with Hong Kong and UK stocks down, while German, French and US markets were positive. For the year, US markets were the best performing developed markets (S&P 500 index up 12%).

The local equity market lost 2.1% over the quarter and finished marginally up for the year. After three successive quarters of strong performance the resource sector was down marginally this quarter, but with significant internal divergence. General mining was up 9.3%, while gold and platinum mining were down a significant 35.5% and 33.0% respectively, following sharp falls in precious metal prices. Resources remained the top performing sector (up 29.0%) for the year, with the platinum sector posting a recovery from a low base (up 50.5%).

Industrials (down 5.4%) underperformed again this quarter as index heavyweight Naspers declined materially (down 15.2%). Many highly rated shares came under pressure: Brait (down 20.7% for the quarter and down 47.0% for the year), British American Tobacco (down 11.3%) and Shoprite (down 10.4%). On the positive side, telcos outperformed (Telkom up 24.6% and MTN up 7.4%). Fashion retailers Truworths and Foschini Group recovered some of the previous quarter's losses (up 14.1% and 12.2% respectively). Industrials underperformed for the year (down 8.3%).

Financials (up 3.2%) outperformed, (with banks strong again this quarter: FirstRand up 14.8%, Barclays up 11.7%, Standard Bank up 7.9% and Nedbank up 7.0%), while insurers again lagged (Old Mutual and Sanlam were down 4.4% and 1.4% respectively). Financials finished the year positively (up 3.6%).

Bonds (up 0.3%) outperformed equities over the quarter, but lagged cash (1.9%). For the year, bonds rose meaningfully (up 15.5%), recovering from over-sold levels at the start of 2016 and benefitting from reduced inflation expectations as the result of the stronger rand.

Fund performance and positioning

Our holdings in cash, preference shares, local property and global stocks added to performance this quarter.

Strong contributors this quarter were African Rainbow Minerals, FirstRand, Tongaat Hulett and Tiso Blackstar Group. Key detractors were Naspers, our holdings in platinum miners and ETFs, as well as Old Mutual.

Foreign stock selection was again positive this quarter, although significantly outweighed by rand strength. UK-listed life insurer Prudential continued to be a strong performer (our position was built up at attractive levels post the Brexit sell-off), as was Tempur Sealy (the world's largest bedding provider). In the aftermath of the US election, we purchased a basket of high quality US banking shares which will be boosted by any increases in interest rates, inflation and business confidence.

Our holding in US energy infrastructure company Kinder Morgan enhanced performance in 2016. The company's share price recovered by almost 50% as utilisation of the company's vast pipeline infrastructure continued to increase. The share price had declined in 2015 amid widespread investor disappointment at its dividend reduction following the steep oil price decline. As North American energy production continues to grow and export volumes increase, Kinder Morgan's unmatched infrastructure network (135 000 km) positions the company for significant growth. An expected recovery in energy prices would further enhance Kinder Morgan's cashflows, enabling the company to continue with dividend payments and pay down debt.

Against a backdrop of still weak economic growth, high asset prices, rising political uncertainty in many large countries, and a potentially disruptive Chinese economic rebalancing, we are guarded on the outlook for financial markets. However, we are cautiously optimistic that financial conditions may have now begun to normalise (in particular higher real rates, inflation and levels of risk-taking).

We continue to position the fund in investment opportunities we identify from deep research and analysis, taking a long-term perspective to identify mispricings. We have a high exposure to mid-cap stocks where we see undervaluation, large positions in the low-cost PGM miners and certain PGM ETFs and very high exposure to global stock picks.

We maintain a hedge against our South African equity exposure and maintain some exposure to foreign equities.