The third quarter of 2019 delivered varied returns across global equity markets. The MSCI World, which has approximately 60% US weighting, and S&P500 Indices returned +0.08% and +1.19% in US dollars respectively following two consecutive rate cuts by the Fed. However, the global economic slowdown, rising trade war tensions and the strengthening US dollar have hampered emerging markets as evidenced by the MSCI Emerging Markets Index losing - 5.11% in US dollars over the quarter. For Britain, the domestic political turbulence and Brexit uncertainty hindered the FTSE 100 over the quarter, resulting in a dispiriting return of -3.52% in US dollars.

On shore, the economic burden of debt-ridden State-Owned Enterprises, faltering economic growth as well as the global market risk sentiment caused the rand to retract by -7.45% during the quarter. Consequent to this and escalating uncertainty surrounding the debt-relief bill and the National Health Insurance, the financial sector was the laggard of the quarter with the FTSE/JSE Africa Financial 15 Index losing -9.26%. From a broader market perspective, the FTSE/JSE Capped SWIX All Share and FTSE/JSE Top 40 Indices delivered -5.11% and -5.22% in ZAR respectively. This is the worst third-quarter performance since Q3 2011 on the back of a brilliant start to 2019. However, platinum miners and gold producers proved to be more resilient in the risk-off environment, with the likes of Northam (+40.88%), Impala (+36.60%) and Harmony (+36.42%) partially counteracting the underperformance of the JSE. The headlining market event of the quarter was the unbundling by Naspers Ltd. (NPN) of its internet company, Prosus NV (PRX). Both NPN and PRX had a strong start after the September 11th unbundling, however, they finished the month down -2.46% and -7.95% respectively.

The low risk enhancements that are utilised as part of the Prescient Core Equity Fund's investment process continued to add value for the third quarter. The fund returned -4.23% gross of fees, ahead of the benchmark index return of -4.31% over the quarter.

Contributors to Performance:
The positions that contributed the most to the absolute performance of the Fund for the month of September were AngloGold American PLC (+7.36%), FirstRand Ltd (+6.18%), and Capitec Bank Holdings Ltd (+17.59%).

Detractors from Performance:
The largest detractors were Naspers Ltd (-2.46%), Sasol Ltd (-12.12%), and Prosus NV (-7.95%).

Despite a broadly flat to slightly negative March, the first quarter of the 2019 calendar year was largely positive for the listed South African equity market. The FTSE/JSE Capped SWIX gained 3.85% over the quarter, whilst the better rand hedged and larger cap JSE Top 40 Index gained an impressive 8.45%, which was the largest quarterly gain since 2017Q3. This was primarily led by the resource and industrial sectors, the FTSE/JSE Africa Resources and the FTSE/JSE Africa Industrials Indices gained 16.18% and 8.80% respectively. During a quarter that saw the country experience crippling electricity outages, heightened uncertainty over its sovereign debt investment grade rating, a record breaking tax revenue shortfall and last but not least an announcement by President Ramaphosa to nationalize SA's central bank, the South African rand weakened by -1.08% against the US dollar and with that, the FTSE/JSE Financial Index lost -0.44% over the quarter.

The FTSE/JSE SWIX Index was rebalanced during the month. The most notable changes were the inclusion of Stor-Age Property REIT Ltd (SSS) and the corresponding exclusions of Montauk Holdings Ltd (MNK) and Texton Property Fund (TEX). Although we take subtle stock tilts from the benchmark, the investment process for the Fund is designed to limit the active stock specific risk whilst also maintaining broad sector neutrality. Low risk performance enhancement strategies are employed to generate modest systematic alpha over the benchmark index. The low risk enhancements that are utilised as part of the Fund's investment process continued to add value. The Fund returned +6.23% (gross of fees), which was 0.22% ahead of the benchmark index for the quarter.

Contributors to Performance: The positions that contributed the most to the absolute performance of the Fund for the month were Naspers (+9.42%), British American Tobacco (+18.72%) and MTN Group (+10.12%).

Detractors from Performance: The largest detractors were Absa Group Limited (-15.78%), Aspen (-33.32%) and Nedbank (-11.66%).