Metropolitan Property Abs Income comment - Sep 04 - Fund Manager Comment21 Oct 2004
During the quarter the fund showed a return of 4.6%. The performance of the listed equity component was 12.5%, which was slightly below the JSE Real Estate performance of 13.2%. The main contributors to performance were Grayprop and Martprop, while the biggest detractor was Sycom. The fund was a net buyer of listed property over the period with the weighting increasing from 22% to 30%.
From a fixed interest point of view saw the unexpected rate cut by the SARB witch helped bonds to outperform cash over the last quarter. From a tactical point of view we invested in bonds for very short periods and had the remainder of funds invested in longer term money market instruments.
Metropolitan Property Abs Income comment - Jun 04 - Fund Manager Comment20 Jul 2004
The Monetary Policy Committee at its last meeting in June kept the repo rate unchanged at 8.5%. With the rand being strong and the latest inflation data surprising at the lower end of expectation we believe that rates will be on hold in the medium term.
Following a difficult second quarter marked by a sharp rise in bond yields and a steepening of the yield curve, bonds ended on a firmer note in June, outperforming cash on the month for the first time since February 2004. The ALBI yielded a return of 1.1% compared with 0.6% by cash. Over the quarter, cash remained the best performing asset class, yielding a return of 1.9%. The recovery in the bond market in June helped to lift the performance of bonds over the quarter to 0.4%, whereas equities remained in negative territory with a negative return of -3.5%.
The return for the fund in the second quarter was +2.1%. This was marginally better than Cash (+2.0%), but outperformed Bonds (+0.4%) and Real Estate (+0.1%).
The weighting in property increased to 22% of the fund, with purchases in Grayprop and Marprop.
Income distribution as at 30 June 2004 = 1.827%
Metropolitan Property Abs Income comment - Mar 04 - Fund Manager Comment05 May 2004
The global recovery is well established although the jobless recovery in the US has been sufficient for the Fed to hold its commitment of lower rates until the unemployment rates start to fall. The upbeat data on Japan over the first quarter has led to revise upward growth forecast for the year of close to 3.8%.
Local GDP growth for 2003 decelerated to 1.9% from 3,6% in 2002, largely due to the strong Rand's impact on the external sector of the economy and manufacturing production.
Despite further Rand appreciation in March 2004 and the decline in US Treasury yields, the domestic bond market focused on a reversal in the downward trend in inflation, acceleration in money supply and slightly higher money market interest rates.
During the quarter the investments in property was increased, with purchases in Marprop and Ambit. The return on property for the fund was -0.5% compared to the Real Estate index of +6.8%. This is mainly attributed to having no exposure to Liberty International, whose share price appreciated 10.9% during the period. The fund would look at opportunities to increase its property exposure.
- The portfolio is co-managed by Chris Naidoo, MetAM's property specialist.
Metropolitan Property Abs Income comment - Dec 03 - Fund Manager Comment27 Jan 2004
Property performed exceptionally well as interest rates declined sharply during the year, retuning 40% over the year and over 15% for the quarter. Property has run well ahead of itself but we do not foresee any bubble in the medium term and would like to add exposure should valuations justify further investment.
We expect bonds and cash to outperform inflation in 2004 but returns would be muted. The fund will be managed actively to ensure capital preservation and reward investors according to mandate.