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Southern Charter BCI Growth Fund

as at: 
30 June 2018

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Investment Objectives

The Southern Charter BCI Growth Fund of Funds is an aggressively managed fund of funds. The primary investment objective of the portfolio is to provide the investor with a relatively high long term total return. The Fund aims to provide investors with capital growth of 7% above inflation over the longer term by investing in a combination of asset classes including local and international equities, fixed interest, property and cash. As the Fund has a high allocation growth assets, it is ideal for investors with a long investment horizon, who seek capital growth and who are at least 10 years from retirement. The fund is Regulation 28 compliant.


The Fund is actively managed with a value bias. By focusing on macro themes, the Fund looks to exploit valuation discrepancies in asset classes when they occur. The allocation to equities will range from 60% to 75%, depending on economic conditions with neutral weighting of 70 %. The balance is allocated to the other asset classes.

Performance (net of all fees)

FundReturn1 Year3 Years5 Years10 Years
SC Growth FoFCumulative5.32%10.88%44.30%148.19%
CPI + 7%Cumulative11.68%43.21%82.67%237.34%
Benchmark *Cumulative9.83%20.65%67.96%207.80%
SC Growth FoFAnnualised5.32%3.50%7.61%9.52%
CPI + 7%Annualised11.68%12.72%12.81%12.93%
Benchmark *Annualised9.83%6.46%10.93%11.90%

Fund Commentary

Trade war concerns continued to dampen sentiment in global markets as China vowed to retaliate against any additional tariffs by the USA. The initial USD34 billion of US tariffs on Chinese goods was expected to be implemented in early July, leaving market participants worried that this would prompt further retaliation from China. The effects of the trade war concerns were evident in the Chinese Shanghai Composite Index, which was down 8.08% month on month (MoM) and is now -13.9% year on year (YoY). The FOMC also met during the month and increased the federal funds rate by a largely expected 25 basis points and indicated that they would hike rates at least twice again before the end of 2018. The prospect of higher US rates, together with uncertainty over global trade continued to weigh in on emerging market (EM) sentiment.

Despite the noise, market returns benefited from the weaker rand (-8.1% vs USD), with Global equities returning 8.2% MoM (in ZAR) and Global properties 10.6% MoM (in ZAR) on the back of continued positive sentiment in the sector. On the local front, South African (SA) equities returned a decent 2.8% MoM (in ZAR). The rebound in the equity market performance from the previous month was driven by a weaker rand as rand hedges benefited from this currency tailwind. Naspers returned an impressive 15.2% MoM (in ZAR) as the company reported that it would consider returning cash to shareholders if it did not find good opportunities to invest its cash pile. Firm commodity prices continued to provide an underpin for Resources, whilst SA Bonds suffered from the EM sell-off. SA property was down 3.5% MoM (in ZAR) on the back of weak sector sentiment and the prospect of rising yields.

Asset Allocation - Values displayed in percentage (%)

Global Equity10.0%19.3%
Global Property0.0%0.4%
Global Bonds5.0%6.5%
SA Cash0.0%2.4%
SA Bonds15.0%11.8%
SA Property10.0%9.8%
SA Equity60.0%49.8%

Asset Class Performance - Values displayed in percentage (%)

1 YearMonthly
Global Equity16.8%8.2%
Global Property10.0%10.6%
Global Bonds6.3%7.5%
SA Cash7.3%0.6%
SA Bonds10.2%-1.2%
SA Property-9.9%-3.5%
SA Equity15.0%2.8%
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Time horizon

10 or more years to retirement

Risk Profile

  • Low
  • Low-Mod
  • Mod
  • Mod-High
  • High
Morningstar Rating: 
3.00 Star

First Floor, Silverberg Terrace

Steenberg Office Park

Steenberg Road

TOKAI, 7945

Authorised Financial Services Provider

Southern Charter Fund Managers (Pty) Ltd FSP No. 740