Given that the fund has just completed its first quarter, a comment on performance would not be considered of huge importance at this stage. I will rather give interested investors some insight into the overall fund philosophy and how the fund is currently positioned.

In line with its philosophy the fund focuses on selecting the best ideas available to investors in the equity market. It is limited to, but can own less than 20 businesses. It is a stock-picking fund that aims to take medium- to long-term views on businesses that have the best business economics and/or are priced well below their fair value. In short, we leverage off the expertise and track record of the entire equity team to construct a portfolio of our best 20 investment ideas.

As a result, the portfolio returns may be volatile in the short term given the concentrated nature of the stock picks combined with the volatile nature of markets. Over the long term, the objective is to benefit from the superior performance of businesses that are best of breed in their industry. The overriding emphasis is on investing in companies where the share price does not reflect fair value.

One of our best picks currently is MTN, which we believe has excellent growth prospects over the next five years as a result of being exposed to countries with very low levels of cell-phone penetration. In the short term, earnings growth will be negatively impacted by the first-time payment of tax in Nigeria. The potential that exists in these new markets could in the medium term dwarf the contribution from the South African market.

Another company that we believe is a very attractive long-term investment is Remgro. Remgro has grown its earnings well in excess of the JSE All Share Index over time, through its ability to effectively allocate capital over the long term. It trades at a discount to net asset value, has attractive rand-hedge qualities and defensive tobacco interests.

We hold the view that most of the commodity stocks' profits are inflated well above normal levels. While this may continue to hold true in the short term, when profits do normalise, share prices will fall significantly. The exception is Sappi, which has suffered from industry overcapacity and a lack of pricing power. We are invested in the business based on a strong earnings recovery that is expected over the next two years.