The objective of the Fund is to outperform the average return of investable peers i.e. the Shari’ah balanced peer average, at risk levels consistent with those of these peers.

Equities continued to show signs of weakness in the third quarter, undoing the positive momentum of the first half of the year. Global equities returned 7.3% in rand terms for the quarter, driven mostly by the rand losing 7.4% of its value against the US dollar. The sell-off happened in July and August when market participants became more concerned about slowing global trade as a result of the US/China trade war. Central banks tried to soften the blow by engaging in expansionary monetary policies, but their efforts fell short.

SA equities followed the global trend losing 5.1% for the quarter, driven by poor performance from resource and financial companies which lost 6.4% and 6.8% respectively. Sasol lost 27.7% of its value after it announced a second delay in its financial results pending an in-depth investigation into the Lake Charles project. Year-to-date, the company is down 39.1%. Single metal companies such as Northam, Implats, Harmony and Sibanye bucked the trend, rallying between 25% and 40% during the quarter. The fall in financials was largely on the back of poor business confidence in SA, which was at a 34-year low in August. In response, most investors have shied away from domestic equities – concerns of poor economic growth, escalating contingent claims from the state-owned companies as well as a stubbornly high unemployment rate are some of the factors that have contributed to this. The same factors drove returns in the property market, which declined 4.2% for the quarter. The presence of UK property companies in the local bourse also detracted from the market. Brexit remains a major problem for these companies. This was evident in Intu’s 39% plunge for the quarter, despite gaining 12% in September.