STANLIB Capped Prprty Index Trckr Comment - Jun 17 - Fund Manager Comment21 Sep 2017
Market Review
The second quarter of 2017 was filled with economic and political uncertainty. Economically, South Africa is not in a good shape; the country officially went into a technical recession after recording two consecutive quarters of negative GDP growth. On the political front, a big fight is brewing on who will ascend to the ANC presidency and ultimately be country’s next president. The unfortunate result of all these is less focus on growing SA’s ailing economy and the risk of introduction of populist policies that will stave off investments. Because of all these and other developments, last quarter’s returns for most domestic asset classes were disappointing, in particular property (Capped property index) recorded a return of 1.86% compared to the cash (SteFi) return of 1.85%. The capped property index has returned 2.46% so far this year. Abroad, developed economies have experienced a fair share of geopolitical surprises but growth remains encouragingly stable. Recent economic data out of the US suggest that there continues to be improvement in economic activity and business confidence.
Fund Review
The fund performed in line with the index in Q2 of 2017. The last quarterly review of the index saw the replacement of Emira Property Fund Ltd by Greenbay Properties Ltd. The fund was repositioned for this change.
Growthpoint remains the largest holding in the fund at 14.81% of equity; its Q2 return of -5.5% makes it one of the biggest detractors from fund performance for the quarter. Rockcastle and Fortress B were the largest contributors to positive performance of the fund, returning 12.9% and 4.4% respectively.
Outlook
We believe that the current economic and political uncertainty will continue in the short term. Furthermore, we expect domestic consumer demand and economic growth to remain depressed. In the light of these, we expect SARB to cut rates by the end of the year in order to stimulate the ailing economy. A cut in interest rates has historically been very positive for property shares on the JSE. Additionally, the fund’s allocation to property shares that derive most of their earnings offshore will help provide some diversification.
STANLIB Capped Prprty Index Trckr Comment - Dec 16 - Fund Manager Comment20 Mar 2017
Fund review
The STANLIB Capped Property Index Tracker Fund is a passively managed index tracking fund. The aim is to replicate the performance of the FTSE/ JSE Capped Property Index (“the Index”) as closely as possible.
The fund is aimed at investors who seek exposure to the JSE listed property stocks at a reduced cost. This exposure is achieved by holding the index constituents in their index proportions.
The fund performed in line with the index in the final quarter of 2016. The last quarterly review of the FTSE/JSE Africa Index series saw the inclusion of Hammerson Plc and Echo Polska Property and the exclusion of Octodec Investment Limited and Pivotal Fund Limited.There were also a number of changes to the free float factors and shares in issue of various constituents. The fund has been repositioned for these changes.
Looking ahead
We continue to maintain a low tracking error to the index whilst keeping track of and adjusting for corporate events and index changes as and when they happen.