The fund was positioned more aggressively relative to its benchmark during the third quarter. The fund manager believes the financial sector offers substantial value in light of recent price declines and the robust earnings growth numbers emerging, particularly for the banking sector.

A 14% unit price increase compared with the Financial index's 50% rise since September1998 will hardly prompt investor applause. The relative performance rot appears to have been halted and current bank and life assurance exposure levels and share holdings reflect financial fund norms. What does not inspire confidence is the fully invested SA portion of the portfolio at February 28, with a 0.6% SA cash holding providing no defence against current market weakness. Wrap fund pressure may be to blame, but this offers cold comfort to other unit holders.
Stafford Thomas
(Source: Financial Mail, March 23, 2001)