The broad South African equity market exposure in the fund is primarily through an allocation to the FTSE/JSE Capped Shareholder Weighted Index (Capped SWIX), which is intended to be a fairer reflection of the investment universe available to a South African investor. The Capped SWIX has a strategic weighting of 35% in the fund and returned +5.3% for the quarter ending December 2019.

The best performing sector was healthcare with a return of +20.5% for the quarter. Telecommunications was the worst performing sector for the quarter, returning -13.3%. In addition to the broad local equity market exposure, the fund also has exposure to SA listed property with a strategic weight of 7.5%. The JSE SA Listed Property Index returned +0.6% for the quarter ending December 2019.

The international equity exposure is invested in the MSCI ACWI ESG Leaders Index, which has a strategic weighting of 15%. The MSCI ACWI ESG Leaders Index offers exposure to both developed and emerging markets globally. The MSCI ACWI ESG Leaders Index returned +8.9% in USD terms for the quarter. The rand strengthened against the US dollar by 7.8% over the quarter, which would have a negative impact on returns to South African investors. To diversify the fund away from equity, the fund invests in nominal bonds through exposure to the JSE All Bond Index (ALBI), which has a strategic weighting of 15%. The ALBI increased by 1.7% for the quarter. The middle of the duration curve was the best performing returning 2.7% while the long duration bonds returned 1.3%.

In addition to the nominal bond exposure, an allocation is also made to inflation-linked government bonds through exposure to The JSE IGOV Index, which has a strategic weight of 10%. The JSE IGOV Index decreased by 1.0% for the quarter.