Performance
For the quarter, the fund returned 1.3% vs the JSE Swix 4.8%. On a 12 month basis the fund has outperformed, returning 12.8% vs the JSE sWIX'S 9.3%.

Macro
Global markets had a positive quarter, returning 8.6% in USD. The US continues to do well, particularly large branded corporates. The change in global earnings growth expectations was 2.2% for 2019. Bond yield are still pricing in negative real rates, while equity ratings are neutral to elevated, specifically in the US. Within equity, there has been a massive divergence between tech & global barands, and other sectors.

In South Africa, government debt levels and the possible loss of our remaining investment grade rating has been fully discounted by fixed income - which has been going on for three years, so nothing new. Where out goverenment bonds trade, they have already priced in a default. The biggest surprise has been how strong the rand has been this year. Issues at Eskom have further weighed on investor sentiment. Of course, by far the biggest impact these issues have had is on the earnings prospects of domestic companies. Despite this, local markets performed well over the quarter, gaining 4.8% in ZAR. The Rand also appreciated over the quarter, gaining 8.1% against the USD. Bond yields have remained flat, ending at 9.0% at end-Deccember (vs 9.0% at end-September), and the SARB kept rates flat over the quarter The market is pricing in at least one more 25bps cut in interest rates over the next 12 months.

Domestic Equity
A specific domestic stock performer was Anglo American (+13.4%). Having no exposure to MTN also added to performance.

The fund's net cash position has decreased slightly to 28% at the end of the quarter.

Global Equity
The Global componet of the portfolio was the largest contributor to performance over the quarter, despite Rand stgrenght. Specific stock performers were B2Gold (+14.1% in USD), Microsoft (+13.8% in USD) and Lonza (+7.9% in USD). The holding in the BlueAlpha BCI Global Equity fund also contributed to performance, returning 12.0% in USD (3.2% in ZAR)

Changes over the quarter included buying B2Gold.