quarterly investment report - comanco · 2019-07-23 · 30 june 2019 quarterly investment report...

QUARTERLY INVESTMENT REPORT3 0 J U N E 2 0 1 9

OUR COMMITMENT.

YOUR INVESTMENT.

DELIVERING RESULTS.

Q U A RT E R LY I N V E S T M E N T R E P O RT30 JUNE 2019

CO N T E N T S

Community Growth Management Company (RF) (Pty) Ltd (COMANCO) Registration No. 1992/002327/07 6th Floor 85 Main Street, Marshalltown 2017, Johannesburg. PO Box 1773, Johannesburg 2000 Tel 011 333 7545 Fax 011 336 8333 Email [email protected] Internet www.comanco.co.za

ECONOMIC OVERVIEW & OUTLOOK

INTERNATIONAL 2 Commentary by Johann Els Old Mutual Investment Group: Chief Economist

LOCAL 3 Commentary by Johann Els Old Mutual Investment Group: Chief Economist

COMMUNITY GROWTH EQUITY FUND

Market Commentary by Brian Pyle 4 Portfolio Manager

FUND INFORMATION 4 as at 30 June 2019

PORTFOLIO REPORT 6 for the quarter ended 30 June 2019

COMMUNITY GROWTH GILT FUND

Market Commentary by Rhandzo Mukansi 8 Portfolio Manager

FUND INFORMATION 8 as at 30 June 2019

PORTFOLIO REPORT 10 for the quarter ended 30 June 2019


UNIVERSE OF SHARES 12

2 QUARTERLY INVESTMENT REPORT

COMMUNITY GROWTH FUNDS

E C O N O M I C O V E R V I E W & O U T L O O K

While the global economy remains on track for a year of better balanced and more synchronised growth as per my base case outlook, overall growth was always expected to be slower in 2019 than last year. Unfortunately, the prolonged trade war has meant that growth forecasts have been downgraded even further.

Throughout April and early May, optimism was still building that a trade deal between the USA and China could be signed by the end of May. However, negotiations broke down around mid-May and the USA raised tariffs from 10% to 25% on US$200bn worth of Chinese imports with threats of tariffs on the remaining US$300bn of untaxed imports as well. China retaliated quickly. This re-escalation hit business confidence hard and we have since seen a significant impact on the manufacturing purchasing managers’ index (PMI) of a number of countries.

Apart from this extension to the trade war, the other surprise in Q2 was the easier policy stance virtually everywhere. While the policy stance of the Federal Reserve Board in the USA (the Fed) has already evolved from the tightening bias during 2018 to a more patient approach early this year, the resultant trade- related growth risks moved them to an easing policy stance at their June policy meeting. The Fed’s dot-plot indicates that seven members of the Federal Open Market Committee (FOMC) – the Fed’s policy-setting committee – now expect 50bps of rate cuts by year-end. Another member expects one cut, eight members expect rates to be unchanged and one expects a rate hike. This

is a substantial shift from no cuts expected by the FOMC when the previous dot-plot was published in March. The market is now widely expecting a rate cut at the July meeting. The consensus expects two 25bp rate cuts in the second half of this year, but some arguments can also be made for a 50bp cut at the July meeting for this “insurance” rate cut to be effective.

The European Central Bank (ECB) has turned more dovish and a rate cut is now on the cards within the next few months. Further-more, the ECB could even extend Quantitative Easing (QE). Else-where, Australia, New Zealand, India, Russia, Malaysia and the Philippines cut rates recently. China, South Africa and others are expected to follow suit.

While easier policy will certainly help the global economy, it will not be enough on its own to engineer a stronger economic recovery. Confidence will only recover sufficiently once the trade war has been resolved. And though it is unlikely that a deal will be signed very soon, any news of progress on this front will help confidence.

Outlook for the global economy: I remain of the opinion that recession risk remains low and growth rotation from the USA to elsewhere should mean better balanced and more synchronised growth – even if at a slower pace than in 2018. With USA rate cuts on the cards, I expect the dollar to weaken. This will still be a better environment for emerging markets in general and South Africa in particular.

Source: Old Mutual Investment Group as at 30 June 2019.

GLOBALJOHANN ELSOLD MUTUAL CHIEF ECONOMIST

330 JUNE 2019ECONOMIC OVERVIEW & OUTLOOK

E C O N O M I C O V E R V I E W & O U T L O O K

First off, despite uncertainty, volatility and very weak economic growth, I believe the “Winds of Change” investment theme is still on track. Nothing ever moves in a straight line – and we have certainly seen enough evidence of that. However, the broad under-lying trend is still up.

The election outcome in May was in line with my expectations – a positive outcome for the political centre. The fringe parties have remained at the fringe while the ANC’s share of the vote has improved from the 2016 local government elections, which – in my view – is the better comparison. I do not believe we should compare the outcome to the 2014 national elections.

This better election outcome allowed President Ramaphosa to improve his Cabinet – cutting the size and removing some non-performing ministers. Perhaps the Cabinet is not perfect yet, but it certainly is a vast improvement. Again, it would be unrealistic to expect overnight change. We are moving in the right direction: the headwinds holding us back are dying down and even turning into tailwinds pushing us forward.

However, the second quarter did have its share of bad news. The economy turned out to be even weaker than previously ex-pected. While I expected a negative growth number for the first quarter – largely thanks to loadshedding – growth was recorded at -3.2% at an annualised pace. The slump was fairly widespread – going beyond the impact of electricity shortages – and ob-viously confidence among consumers and business was very weak amidst the pre-election uncertainty. Despite some rebound expected in second quarter GDP growth – already initial data for April suggests some turnaround in electricity and manufacturing production and retail sales. Nevertheless, 2019 GDP growth is now likely to stay close to the 0.8% reached last year.

Clearly a confidence turnaround is needed to help lift economic growth. And this is still possible through policy change. One

of the highlights of President Ramaphosa’s State of the Nation Address was the return of the National Development Plan (NDP) as the guiding light to get economic growth onto a higher trajec-tory. The NDP is a great plan but has not been implemented to the extent needed. Better policy and stronger confidence could lead to increased economic activity and I believe 3% growth is possible by 2021/2022.

Inflation remains muted, with almost no evidence of second round price pressures despite significant cost increases in areas such as electricity and petrol. Food inflation has been well con-tained but is expected to rise towards December. I still expect inflation to average 4.4% this year and 4.7% in 2020.

A much more dovish global monetary policy stance, combined with local growth downside surprises (both in terms of actual and forecast growth) and muted inflation has led to an easier policy stance at the South African Reserve Bank. I now expect a rate cut at the July Monetary Policy Committee (MPC) meeting. Unfortunately, there is not room for a significant downcycle – we can have one or two rate cuts at most. While rate cuts will certainly help lift sentiment, I do not expect them to have a big impact on the growth outlook. For that we need confidence boosting policies.

Outlook for the SA economy: Easing global policy and a weaker USA dollar should help to improve the environment for emerging economies. This, in turn, should help SA this year. The comeback of the NDP and better policy implementation should also help growth to slowly gather pace in the second half of the year. Inflation will likely remain subdued. While a rate cut is now on the cards, better policy implementation and stronger confi-dence are needed. I then expect the rand to benefit later this year from the weaker dollar and improved confidence and growth.

Source: Old Mutual Investment Group as at 30 June 2019

LOCALJOHANN ELSOLD MUTUAL CHIEF ECONOMIST



FUND MANAGERBRIAN PYLEPORTFOLIO MANAGER 19 Years industry experience B. Com, CA (SA), CFA

DISCLOSURE OF FSP Old Mutual Equities is an equity boutique within Old Mutual Investment Group (Pty) Ltd, which is a Licensed Financial Services Provider, FSP 604.

MARKET COMMENTARY 30 June 2019The second quarter of 2019 was volatile; at one stage the FTSE/JSE Shareholder Weighted All Share Index (SWIX) was 3.9% down, but finished the quarter at 3.1% up. The South African market continued to be heavily influenced by global news flow – par-ticularly the development of the “trade war” between the USA and China (it is interesting how the way we get news flow has changed and markets now move one way or another off the back of Twitter comments). The MSCI World Index increased by 3.4% in US dollar terms in Q2 2019, continuing the strong re-bound from a particularly weak last three months of 2018.

Resource shares have had a particularly good start to the year, with the FTSE/JSE Resources Index (J258) returning 18.4%. This was partly driven by increasing commodity prices, particularly iron ore (+57.7%) and rhodium (+32.1%).

SA Inc. shares (those companies generating the majority of their earnings locally) on the other hand continued to strug-gle. This comes off the back of poor results released by com-panies in the first half of 2019. The poor results are generally reporting particular difficulty in passing on rising input costs (for instance, a higher fuel price), while demand (and therefore turnover) remains under pressure – this, of course, means that companies’ operating margins are under pressure and many have announced restructuring plans.

We believe that this fund gives investors a good balance of exposure to a diversified basket of global stock markets, shares and currencies. We continue to actively seek investment oppor-tunities in the local and global markets.


FUND INFORMATIONRISK PROFILE

Risk Profile

Low to Moderate

Moderate Moderate to High

HighLow

Low to Moderate


HighLow

Low to Moderate


HighLow

Low to Moderate


HighLow

Low to Moderate


HighLow

FUND OBJECTIVETo provide long-term capital growth and returns in excess of in-flation while promoting social responsibility investing. The fund invests in companies that are concerned with job creation, training and skills development, employment equity, economic and social empowerment, high health and safety standards, sound environ-mental practices and effective corporate governance.

RECOMMENDED MINIMUM INVESTMENT TERM

1 year + 3 year + 5 year +



INVESTMENT MANDATESouth African listed securities that comply with socially respon-sible criteria. All investments in SA equity must be approved by Unity Incorporation according to SRI guidelines. The fund main-tains 75% equity exposure at all times.

CHARACTERISTICS OF THE FUND AND RISKSThis fund is suited to investors seeking long-term capital growth while investing in socially responsible investments.

Fund Category South African - Equity - General

Fund Benchmark FTSE/JSE All Share Index

Launch Date 1 June 1992

Fund Size R95 million

Fund Code CGMG

Dealing Price NAV

Distributions Declared in February 2019

September 2017: 29.30c per unit

September 2018: 41.62c per unit

February 2019: 8.92c per unit

Minimum Investment R5 000 lump sum.

Monthly debit order R500.

Initial Charge No initial administration charge.

Initial adviser fee will be between

0% to 3.45% (incl. VAT).

Service Fee 0.5% p.a.

NAV Price

(cents/unit)

1 249.42c

Total Expense Ratio (TER)* 0.65% (Annualised)

C O M M U N I T Y G R O W T H E Q U I T Y F U N D30 JUNE 2019

530 JUNE 2019COMMUNITY GROWTH EQUITY FUND

FUND PERFORMANCE as at 30 June 2019

% Performance (annualised)YEARS FUND % FUND BENCHMARK % CATEGORY RANKINGS

1 7.6 3.2 13/157

3 4.4 5.7 35/126

5 4.7 4.7 28/98

7 9.8 10.2 29/81

10 10.5 12.2 37/58

*Past performance is no indication of future performance.

FUND (since Inception)

HIGHEST%

AVERAGE%

LOWEST%

12-month returns 53.56% 13.37% -34.68%

FUND COMPOSITION as at 30 June 2019

TOP TEN HOLDINGSINSTRUMENT

NASPERS LTD 20,775,674

BHP GROUP PLC 10,041,614

ANGLO AMERICAN PLC 6,352,354

SASOL LTD 3,978,494

STANDARD BANK GROUP LTD 3,392,796

FIRSTRAND LTD 3,131,318

THE BIDVEST GROUP LTD 3,040,254

INVESTEC PLC 2,965,762

ABSA GROUP LIMITED 2,933,749

ANGLOGOLD ASHANTI LIMITED 2,856,860

TOTAL 59,468,875

SECTOR ALLOCATIONSBASIC MATERIAL 23.00

CONSUMER GOODS 0.92

CONSUMER SERVICES 31.54

TELECOMMUNICATIONS 2.48

FINANCIALS 24.86

HEALTH 0.52

INDUSTRIALS 6.73

OIL & GAS 4.17

TECHNOLOGY 2.05

ASSETS IN LIQUID FORM 3.72

TOTAL 100.00

OTHERMARKET VALUE (R MILL) 95,438,593

NET ASSET VALUE 91,886,230

BUY & SELL PRICE (CENTS) 1,249.42

ASSET ALLOCATION 96 % Equity

4 % Assets in Liquid form

TOP TEN HOLDINGS

Tel: 011 333 7545 • Fax: 011 336 8333 www.comanco.co.za • [email protected]

STATUTORY INFORMATIONCollective Investment Schemes in Securities (unit trusts) are gener-ally medium- to long-term investments. Past performance is no indication of future growth. Unit trusts may engage in scrip lending and may borrow up to 10% of the market value of the portfolio to bridge insufficient liquidity. Unit trust prices are calculated on a net asset value (NAV) basis, which is the total market value of all assets in the portfolio including any income accrual and less any permissible deductions from the portfolio divided by the number of units in issue. Each fund’s total expense ratio (TER) reflects the percentage of the average Net Asset Value of each portfolio that was incurred as charges, levies and fees related to the manage-ment of the portfolio.

Instructions to withdraw must reach Community Growth Manage-ment Company (RF) (Pty) Ltd (COMANCO) before 15h00 to ensure same day value.

The portfolio performance is calculated on a NAV-NAV basis and does not take any initial fees into account. Income is reinvested on the ex-dividend date NAV price. Actual investment performance will differ based on the initial fees applicable, the actual investment date and the date of reinvestment of income.

Additional information is available free of charge and you could email: [email protected]

TRUSTEES

The Standard Bank of South Africa Limited, PO Box 54, Cape Town, 8000. Tel: +2721 401 2002, Fax: +27 24 401 3887

COMMUNITY GROWTH MANAGEMENT COMPANY (RF) (Pty) Ltd (COMANCO) is a licensed Management Company approved by the Registrar of Collective Investment Schemes (www.fsb.co.za), (Registration no. 1992/002327/07) 6TH FLOOR, 85 Main Street, Marshalltown, Johannesburg, 2017.

0.92%Consumer Goods

31.54%Consumer Services

2.48%Telecommunications

23.00%Basic Material

3.72%Assets in Liquid Form

2.05%Technology

4.17%Oil & Gas

6.73%Industrials

0.52%Health

24.86%Financials



C O M M U N I T Y G R O W T H E Q U I T Y F U N DPORTFOLIO REPORT FOR THE QUARTER ENDED 30 JUNE 2019

DETAILS (NAME OF INSTRUMENT) 2018AT 31 MAR AT 30 JUN

EXCHANGE SECURITIES - LOCAL 91,886,230 96.28

BASIC MATERIAL 21,946,135 23.00

BASIC RESOURCES 21,946,135 23.00

GENERAL MINING 16,393,968 17.18

ANGLO AMERICAN PLC 15,848 15,848 6,352,354 0.001 5.33 6.39 6.66 AGL

BHP GROUP PLC 27,714 27,714 10,041,614 0.001 10.02 12.02 10.52 BHP

GOLD 2,856,860 2.99

ANGLOGOLD ASHANTI LIMITED 11,271 11,271 2,856,860 0.003 1.40 1.68 2.99 ANG

PLATINUM 2,695,307 2.83

ANGLO AMERICAN PLATINUM LIMITED 1,756 1,756 1,450,895 0.001 0.67 0.81 1.53 AMS

IMPALA PLATINUM HOLDINGS LTD 18,069 18,069 1,244,412 0.002 0.62 0.75 1.30 IMP

CONSUMER GOODS 882,354 0.93

FOOD & BEVERAGE 882,354 0.93

FOOD PRODUCERS 882,354 0.93

RCL FOODS LIMITED 76,065 76,065 882,354 0.008 0.04 0.04 0.93 RCL

CONSUMER SERVICES 30,104,269 31.54

MEDIA 21,596,686 22.63

MEDIA 21,596,686 22.63

MULTICHOICE GROUP LIMITED 6,101 6,101 821,012 0.001 0.76 0.91 0.86 MCG

NASPERS LTD 6,101 6,101 20,775,674 0.001 19.35 23.22 21.77 NPN

RETAIL 7,603,225 7.96

FOOD & DRUG RETAILERS 3,743,112 3.92

DISCHEM PHARMACIES LIMITED 74,096 74,096 1,910,936 0.009 0.13 0.16 2.00 DCP

SHOPRITE HOLDINGS LTD 5,737 5,737 911,724 0.001 0.99 1.18 0.96 SHP

SPAR GROUP LIMITED 4,889 4,889 920,452 0.003 0.48 0.57 0.96 SPP

GENERAL RETAILERS 3,860,113 4.04

ADVTECH LIMITED 106,285 106,285 1,470,984 0.019 0.10 0.12 1.54 ADH

MOTUS HOLDINGS LTD 5,219 5,219 383,597 0.003 0.17 0.21 0.40 MTH

THE FOSCHINI GROUP LTD 11,095 11,095 2,005,532 0.005 0.55 0.66 2.10 TFG

TRAVEL & LEISURE 904,358 0.95

TRAVEL & LEISURE 904,358 0.95

CITY LODGE HOTELS LTD 8,823 8,823 904,358 0.020 0.05 0.06 0.95 CLH

TELECOMMUNICATIONS 2,365,962 2.48

TELECOMMUNICATION 2,365,962 2.48

MOBILE TELECOMMUNICATIONS 2,365,962 2.48

MTN GROUP LIMITED 22,011 22,011 2,365,962 0.001 2.55 3.06 2.48 MTN

FINANCIALS 23,724,726 24.85

BANKS 12,014,826 12.59

BANKS 12,014,826 12.59

ABSA GROUP LIMITED 16,635 16,635 2,933,749 0.002 1.69 2.03 3.08 ABG

FIRSTRAND LTD 45,686 45,686 3,131,318 0.001 2.90 3.47 3.28 FSR

NEDBANK GROUP LTD 10,095 10,095 2,556,963 0.002 1.34 1.61 2.68 NED

STANDARD BANK GROUP LTD 17,197 17,197 3,392,796 0.001 3.35 4.01 3.55 SBK

HOLDINGS HOLDINGSMARKET

VALUE

% OF ISSUED SHARE

CAPITAL

% WEIGHTING

IN INDEX NALSIM

120% INDEX

WEIGHTING% OF

PORTFOLIOSHARE CODE

730 JUNE 2019COMMUNITY GROWTH EQUITY FUND

C O M M U N I T Y G R O W T H E Q U I T Y F U N DPORTFOLIO REPORT FOR THE QUARTER ENDED 30 JUNE 2019

INSURANCE 7,986,098 8.36

LIFE INSURANCE 6,531,562 6.85

OLD MUTUAL LIMITED 129,625 129,625 2,754,530 0.003 1.36 1.63 2.89 OMU

QUILTER PLC 43,208 43,208 1,082,793 0.002 0.40 0.48 1.14 QLT

SANLAM LTD 34,462 34,462 2,694,239 0.001 1.82 2.18 2.82 SLM

NONLIFE INSURANCE 1,454,536 1.51

SANTAM LTD 4,743 4,743 1,454,536 0.004 0.17 0.20 1.51 SNT

FINANCIAL SERVICES 3,723,802 3.90

GENERAL FINANCIAL 3,723,802 3.90

INVESTEC PLC 32,395 32,395 2,965,762 0.005 0.80 0.96 3.11 INP

RAND MERCHANT INVESTMENT HOLDINGS LTD 22,315 22,315 758,040 0.001 0.34 0.41 0.79 RMI

HEALTH 500,196 0.52

HEALTHCARE 500,196 0.52

HEALTH CARE EQUIPMENT & SERVICES 0 0.00

NETCARE LIMITED 64,226 0 0.000 0.34 0.41 0.00 NTC

PHARMACEUTICALS & BIOTECHNOLOGY 500,196 0.52

ASPEN PHARMACARE HOLDINGS LIMITED 4,986 4,986 500,196 0.001 0.51 0.61 0.52 APN

INDUSTRIALS 6,426,451 6.74

INDUSTRIAL GOODS & SERVICES 6,426,451 6.74

INDUSTRIAL TRANSPORTATION 787,099 0.82

IMPERIAL LOGISTICS LTD 5,219 5,219 271,023 0.003 0.11 0.14 0.28 IPL

TRENCOR LTD 23,458 23,458 516,076 0.014 0.05 0.06 0.54 TRE

SUPPORT SERVICES 5,639,352 5.92

BIDCORP 8,385 8,385 2,599,098 0.002 1.35 1.62 2.73 BID

THE BIDVEST GROUP LTD 15,819 15,819 3,040,254 0.005 0.85 1.02 3.19 BVT

OIL & GAS 3,978,494 4.17

OIL & GAS 3,978,494 4.17

OIL & GAS PRODUCERS 3,978,494 4.17

SASOL LTD 11,372 11,372 3,978,494 0.002 2.60 3.12 4.17 SOL

TECHNOLOGY 1,957,643 2.05

TECHNOLOGY 1,957,643 2.05

SOFTWARE & COMPUTER SERVICES 1,457,322 1.53

DATATEC LTD 41,805 41,805 1,457,322 0.019 0.09 0.11 1.53 DTC

TECHNOLOGY HARDWARE & EQUIPMENT 500,321 0.52

MUSTEK LTD 61,768 61,768 500,321 0.088 0.00 0.00 0.52 MST

ASSETS IN LIQUID FORM 3,552,363 3.72

DEPOSITS WITH BANKS/MUTUAL BANKS/FOREIGN BRANCHES

3,438,609 3.60

Local Cash 3,438,609 3.60

Foreign Cash 0 0.00

SETTLEMENT ACCOUNT POSITIVE (+) 113,754 0.12

SETTLEMENT ACCOUNT NEGATIVE (-) 0 0.00

TOTAL ASSETS 95,438,593 100.00


VALUE

% OF ISSUED SHARE

CAPITAL

% WEIGHTING

IN INDEX NALSIM

120% INDEX

WEIGHTING% OF

PORTFOLIOSHARE CODE



C O M M U N I T Y G R O W T H G I LT F U N D30 JUNE 2019

FUND INFORMATIONRISK PROFILE

Low to Moderate


HighLow

Low to Moderate


HighLow

Low to Moderate


HighLow

Low to Moderate


HighLow

Low to Moderate


HighLow

FUND OBJECTIVETo maximise this fund’s total returns through a balance of capital growth and a high level of income. To invest funds into longer term, fixed interest instruments with an emphasis on institutions and projects than contribute to the development of South Africa through meaningful social impact, commitment to development, community participation and support.

INVESTMENT MANDATEThe fund invests in interest-bearing securities and money market instruments. All investments in interest-bearing securities must be approved by Unity Corporation.

CHARACTERISTICS OF THE FUND AND RISKSThis fund is suited to astute investors who have a particular view on a single asset class whilst investing in socially responsible invest-ments. The investor understands the impact of the interest rate cycle and accepts this risk in exchange for moderate capital growth. The Fund is exposed to both interest rate risk and credit risk. In terms of interest rate risk, the risk to the Fund is moderate as the mandate allows for limited positioning relative to bench mark and in terms of credit risk; the Fund’s investments are limited to listed credit assets with a credit rating of investment grade or better.

Fund Category South African – Interest Bearing – Variable Term

Fund Benchmark BEASSA All Bond Index

Launch Date 14 July 1998

Fund Size R10 million

Fund Code CGMI

Dealing Price NAV

Distributions Declared: February 2019 Distributed 1 business day after declaration June 2018: 5.80c per unit August 2018: 5.63C per unit February 2019: 6.42 per unit

Minimum Investment R5 000 lump sum. Monthly debit order R500.

Initial Charge No initial administration charge. Initial adviser fee will be between 0% to 0.68% (incl. VAT).

Service Fee 0.5% p.a.

NAV Price (cents/unit)

153.70c

Total Expense Ratio (TER)* 0.67% (Annualised)

FUND MANAGERRHANDZO MUKANSIPORTFOLIO MANAGER B.Com Finance (Hons) 5 years of investment experience

DISCLOSURE OF FSP Futuregrowth Asset Management (Pty) Ltd (“Future-growth”) is a licensed discretionary financial services provider, FSP 520.

MARKET COMMENTARY 30 June 2019Our main concern regarding the bond market remains the strong link between lacklustre economic growth and the lack of fiscal con-solidation. More specifically, this points to the rising debt burden of the state, which arises as a consequence of the lack of fiscal consolidation. This continues to threaten the country’s sovereign risk profile and places pressure on domestic funding costs. The risk of a failed economic recovery has certainly not dissipated; with this firmly supported by disappointing first quarter GDP data. This makes us question the quality of tax revenue collections, and con-sequently the state of health of the tax base, which in turn keeps the risk of a budget deficit overrun at elevated levels. The financial burden of poorly managed SOEs on state finances has reached a point where the delivery of a credible national budget is nearly impossible in the absence of a substantial remedial action for the unfolding financial disaster. The proverbial chickens, mainly in the form of Eskom, have come home to roost and this requires more than the usual liquidity provision. Addressing solvency is an entirely different matter, requiring more than simply kicking the can down the road via more liquidity bail-outs.

We continue to endeavour to strike a balance between avoiding capital loss in the case of a market sell-off and losing out on the ac-crual offered by a steeply sloped yield curve. We have also consid-ered the fact that long-dated nominal bonds are currently trading at an attractive real yield of around 4%. So, while our broad interest rate investment strategy remains defensive, the modified duration variance of -0.2 is some way off the maximum allowed position of -1.0. This acknowledges reasonable valuation, which partly offsets the relatively poor investment theme.

The fund underperformed the benchmark by 0.2% on a net of fee basis for the 12-month period ending June 2019. This was mainly due to the more conservative positioning of the fund relative to the benchmark, specifically the underweight modified duration position during the period under review. This negative contribution was partly offset by the accrual earned from the higher yielding non-government bond holding in the fund.

The fund is defensively positioned, with an underweight modified duration tilt of 0.2 relative to the All Bond Index modified duration of 7.1. This is the result of a smaller holding of nominal bonds with a term to maturity of 25 years and longer relative to the benchmark.


930 JUNE 2019COMMUNITY GROWTH GILT FUND

C O M M U N I T Y G R O W T H G I LT F U N D30 JUNE 2019

FUND PERFORMANCE as at 30 June 2019% Performance (annualised)

YEARS FUND % FUND BENCHMARK % CATEGORY RANKINGS

1 10.8 10.9 12/30

3 9.5 9.2 11/25

5 8.2 8.0 7/16

7 7.8 7.2 6/14

10 9.2 8.4 5/14

*Past performance is no indication of future performance.

FUND (since Inception)

HIGHEST%

AVERAGE%

LOWEST%

12-month returns 12.79 0.72 -14.13

PORTFOLIO COMPOSITION as at 30 June 2019

TEN LARGEST HOLDINGS as at 30 June 2019

HOLDING % MARKET VALUE

RSA 8.50 31012037 1 085 433

RSA 8.75 28022048 1 059 424

RSA 8.00 31012030 895 381

RSA 8.875 28022035 857 350

RSA 9.00 31012040 797 519

RSA 8.75 31012044 607 712

RSA 8.25 31032032 557 125

RSA 10.5 21122026 481 347

ESKOM HOLDINGS LTD 8.5 25042042 315 501

ES33 7.5 150933 230 466

NAV AS AT 31.12.2018 153.70

MATURITY BANDS% MARKET VALUE

0-3 YEARS 4.3% 430 120

3-7 YEARS 12.7% 1 277 728

7-12 YEARS 21.6% 2 169 687

12+ YEARS 57.6% 5 790 210

CASH 3.9% 390 147

NET ASSET VALUE 100.0% 10 057 892


STATUTORY INFORMATIONCollective Investment Schemes in Securities (unit trusts) are gener-ally medium- to long-term investments. Past performance is no indication of future growth. Unit trusts may engage in scrip lending and may borrow up to 10% of the market value of the portfolio to bridge insufficient liquidity. Unit trust prices are calculated on a net asset value (NAV) basis, which is the total market value of all assets in the portfolio including any income accrual and less any permissible deductions from the portfolio divided by the number of units in issue. Each fund’s total expense ratio (TER) reflects the percentage of the average Net Asset Value of each portfolio that was incurred as charges, levies and fees related to the manage-ment of the portfolio.

Instructions to withdraw must reach Community Growth Manage-ment Company (RF) (Pty) Ltd (COMANCO) before 15h00 to ensure same day value.

The portfolio performance is calculated on a NAV-NAV basis and does not take any initial fees into account. Income is reinvested on the ex-dividend date NAV price. Actual investment performance will differ based on the initial fees applicable, the actual investment date and the date of reinvestment of income.

Additional information is available free of charge and you could email: [email protected]

TRUSTEES



MATURITY BANDS

0-3 Years 4.3%

3-7 Years 12.7%

7-12 Years 21.6%

12+ Years 57.6%

Cash 3.9%



C O M M U N I T Y G R O W T H G I LT F U N DPORTFOLIO REPORT FOR THE QUARTER ENDED 30 JUNE 2019

DETAILS (NAME OF INSTRUMENT) AT 31 MAR 2019 AT 30 JUN 2019

NON-EQUITY SECURITIES (GROUP PER ISSUER PER SECURITY) 9,667,745 96.12

LISTED BONDS/PREFERENCE SHARES/DEBT INSTRUMENTS 9,667,745 96.12

AIRPORTS COMPANY SOUTH AFRICA LTD 109,000 1.08

AIR02 11.68 30042023 1,300,000 100,000 109,000 1.08 AIR02

BARLOWORLD LTD 93,388 0.93

BAW21 9.295 24032022 1,190,164 90,164 93,388 0.93 BAW21

CITY OF CAPE TOWN 216,281 2.15

CCT01 23062023 200,000 0 0.00 CCT01

CCT02 120624 1,400,000 100,000 108,925 1.08 CCT02

CCT03 15032025 1,100,000 100,000 107,356 1.07 CCT03

CITY OF JOHANNESBURG 218,369 2.17

COJ05 12.205 05062023 1,100,000 100,000 112,680 1.12 COJ05

COJ08 11.455 22062026 600,000 0 0.00 COJ08

COJG01 10.18 09062024 1,500,000 100,000 105,689 1.05 COJG01

COMMISSIONER STREET NO 4 (RF) LIMITED

MEFSB5 05012022 2,000,000 0 0 0.00 MEFSB5

EKURHULENI MUNICIPALITY 258,655 2.57

CITY OF EKURHULENI METROPOLITAN MUNICIPALITY 10.25 23062025 1,476,945 71,026 71,510 0.71 EMM06



ESKOM HOLDINGS LTD 743,482 7.39

ES33 7.5 150933 6,700,000 300,000 230,466 2.29 ES33

ESKOM HOLDINGS LIMITED 10.00 25012023 2,200,000 100,000 104,792 1.04 ES23

ESKOM HOLDINGS LTD 8.5 25042042 9,100,000 400,000 315,501 3.14 ES42

ESKOM HOLDINGS LTD ES26 02042026 1,900,000 100,000 92,723 0.92 ES26

FIRSTRAND BANK LTD 205,560 2.04

FRX23 7.75 28022023 2,200,000 100,000 99,257 0.99 FRX23

FRX27 10.19 07032027 900,000 100,000 106,303 1.05 FRX27

KOMATI BASIN WATER AUTHORITY

KOMATI BASIN WATER AUTHORITY 13.50 2027 700,000 0 0 0.00 KW01

RAND WATER BOARD 199,812 1.99

RAND WATER 21 9.97 21042021 1,813,162 0 0.00 RW21

RW23 9.51 10122023 2,400,000 100,000 102,172 1.02 RW23

RW28 10.245 10122028 2,400,000 100,000 97,640 0.97 RW28

REPUBLIC OF SOUTH AFRICA 6,350,660 63.14

RSA 10.5 21122026 7,500,000 425,000 481,347 4.79 R186

RSA 6.25 31032036 12,772 12,772 9,369 0.09 R209

RSA 8.00 31012030 14,500,000 950,000 895,381 8.90 R2030

RSA 8.25 31032032 13,700,000 600,000 557,125 5.54 R2032

RSA 8.50 31012037 18,992,857 1,192,857 1,085,433 10.79 R2037


VALUE% OF

PORTFOLIO SHARE CODE

1130 JUNE 2019


VALUE% OF

PORTFOLIO SHARE CODE

RSA 8.75 31012044 14,300,000 670,000 607,712 6.04 R2044

RSA 8.75% 28022048 22,021,231 1,171,231 1,059,424 10.54 R2048

RSA 8.875 28022035 15,600,000 900,000 857,350 8.52 R2035

RSA 9.00 31012040 18,000,000 850,000 797,519 7.93 R2040

SA NATIONAL ROADS AGENCY LTD 494,539 4.91

NRA022 12.25 31102022 2,800,000 100,000 112,028 1.11 NRA022

NRA028 12.25 30122028 2,000,000 100,000 112,200 1.12 NRA028

SA NATIONAL ROADS AGENCY 9.25 4,600,000 200,000 180,403 1.79 HWAY34

SA NATIONAL ROADS AGENCY 9.25 31072035 1,300,000 100,000 89,908 0.89 HWAY35

STANDARD BANK OF SOUTH AFRICA LTD

SBS27 10.13 20022024 300,000 0 0.00 SBS27

TELKOM SOC LTD

TL20 6.00 24022020 1,100,000 0 0.00 TL20

THEKWINI FUND 14 (RF) LIMITED 309,760 3.09

T14A12 9.15 21112021 1,500,000 100,000 101,249 1.01 T14A12

TH14A4 10.098 21112021 1,200,000 100,000 105,234 1.05 TH14A4

TH14A8 9.35 22112021 1,300,000 100,000 103,277 1.03 TH14A8

TRANSNET SOC LTD 397,088 3.95

TN20 10.5 17092020 300,000 0 0.00 TN20

TN23 10.8 06112023 2,800,000 100,000 107,417 1.07 TN23

TN30 10.50 09102030 1,200,000 100,000 99,635 0.99 TN30

TRANSNET LIMITED 8.9 14112027 5,100,000 200,000 190,036 1.89 TN27

TRANSSEC (RF) LTD 26,973 0.27

TRA2A6 9.69 14122020 480,509 26,358 26,973 0.27 TRA2A6

UMGENI WATER BOARD 44,178 0.44

UG21 10.70 02032021 1,577,009 0 0.00 UG21

UG26 11.31 09032026 941,575 41,575 44,178 0.44 UG26

ASSETS IN LIQUID FORM 390,147 3.88

MONEY MARKET INSTRUMENTS

ABSA BANK LTD

ABSA NCD 8.175 27022020 2,000,000 0 0.00 NCDBB887

INVESTEC BANK LTD

INVESTEC NCD 8.2 05032020 4,000,000 0 0.00 NCDIV388

INVESTEC NCD 8.2 27022020 1,000,000 0 0.00 NCDIV383

DEPOSITS WITH BANKS/MUTUAL BANKS/FOREIGN BRANCHES 390,147 3.88

Local Cash 390,147 3.88

Foreign Cash 0 0.00

SETTLEMENT ACCOUNT POSITIVE (+) 0 0.00

SETTLEMENT ACCOUNT NEGATIVE (-) 0 0.00

TOTAL ASSETS 10,057,892 100.00

C O M M U N I T Y G R O W T H G I LT F U N DPORTFOLIO REPORT FOR THE QUARTER ENDED 30 JUNE 2019

COMMUNITY GROWTH GILT FUND




UNIVERSE OF SHARESABIL

ABSA GroupAdcorp Holdings

AdvtechAECI

African Bank InvAltechAltron

Anglo American PlcAngloGoldAngloplats

ArcelorMittalAST/Gijima

AvengAvusa

BarclaysBarloworld

Bell EquipmentBHP

Bidvest Group LtdBilliton Plc

Business ConnexionCashbil

City Lodge HotelsCoronation Fund Managers

Datacentrix HoldingsDatatec

Didata HoldingsDiscovery Holdings

DorbylELB GroupFirstRand

FoschiniGold Fields

Group 5Harmony

Hudaco IndustriesIllovo Sugar

Impala PlatinumImperial Holdings

Investec LtdInvestec Plc

JD Group

Lonmin PlcMassmart HoldingsMetropolitanMMI HoldingsMTNMurray & RobertsMustekMutual & FederalNampakNaspersNedbankNetcareNew Clicks HoldingsOceana GroupOld Mutual plcPalabora MiningPick n Pay HoldingsPick n Pay StoresPPCPSG Group LtdRainbow ChickenRCL FoodsReunertRMB HoldingsSABMillerSanlamSantamSappiSasolShoprite HoldingsSibanye GoldSparSpescomStanbankSteinhoff Int HoldingsTelkomTiger BrandsTimesmedTongaat-Hulett GroupTrencorTruworths IntUnitransWoolworths


STATUTORY INFORMATIONCollective Investment Schemes in Securities (unit trusts) are gen-erally medium- to long-term investments. Past performance is no indication of future growth. Unit trusts may engage in scrip lending and may borrow up to 10% of the market value of the portfolio to bridge insufficient liquidity. Unit trust prices are calculated on a net asset value (NAV) basis, which is the total market value of all assets in the portfolio including any income accrual and less any permissible deductions from the portfolio divided by the number of units in issue. Each fund’s total expense ratio (TER) reflects the percentage of the average Net Asset Value of each portfolio that was incurred as charges, levies and fees related to the management of the portfolio.

Instructions to withdraw must reach Community Growth Man-agement Company (RF) (Pty) Ltd (COMANCO) before 15h00 to ensure same day value.

The portfolio performance is calculated on a NAV-NAV basis and does not take any initial fees into account. Income is reinvested on the ex-dividend date NAV price. Actual investment performance will differ based on the initial fees applicable, the actual invest-ment date and the date of reinvestment of income. Additional in-formation is available free of charge and you could email: [email protected]

TRUSTEES



QUARTERLY INVESTMENT

REPORT3 0 J U N E 2 0 1 9

OUR COMMITMENT.

YOUR INVESTMENT.

DELIVERING RESULTS.

quarterly investment report - comanco · 2019-07-23 · 30 june 2019 quarterly investment report...

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