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SIM Equity funds produce the goods consistently

20 October 2009 Sanlam Investment Management?s (SIM)
Candice Paine, head of SIM Retail

Candice Paine, head of SIM Retail

Sanlam Investment Management’s (SIM) three core equity funds have consistently produced the goods over the past three to five years. Out of a pool of just over 70 general equity and value funds, SIM’s Value Fund, General Equity Fund and Top Choice Funds have consistently ranked in the top deciles and quartile over a period of time. As at the end of September this year, the SIM Value Fund had delivered a return of 24.10% annualised over five years, ranking 4th out of about 60 general equity funds. Sanlam’s Top Choice ranked 4th and returned 13.64% annualised over a three year period. The JSE All Share’s annualised performance for the same period was 6.66% and 19.53% respectively.

Candice Paine, head of SIM Retail, says equity funds have been in the spotlight again following the recovery in global and local markets since March this year. Sanlam’s General Equity fund gained 10.62% annualised over three years and was ranked 16th. The General Equity fund is a pure South African equity fund diversified across all sectors of the JSE. It aims to achieve maximum capital growth over the medium to long term by investing in companies that are undervalued relative to realistic growth prospects. Some of the funds top 10 holdings include MTN, Sasol, Old Mutual and SAB Miller.

The Sanlam Top Choice Fund is managed by Patrice Rassou and was launched just over three years ago. Over the past three years it has returned 13.64% a year and ranks fourth in terms of performance over three years. This is a high conviction fund taking concentrated bets in only 20 stocks at a time. Because the fund’s investable universe is the top 10 stocks held in any other SIM equity portfolio, this fund represents SIM’s best equity investment ideas.

Paine says equity valuations are currently close to fair value and thus offer the opportunity of still achieving positive real returns in the long term. “Even though we have just experienced a very challenging investment environment, over five years or more equities are still likely to offer superior real returns to other asset classes and buying them when they are not overvalued or close to fair value will more than likely pay off.”

All SIM’s retail equity funds follow an unconstrained approach to investing – also known as ‘best ideas’ investing – where the primary aim is to maximise expected portfolio returns, while also minimising any potential capital loss. This approach enables fund managers to construct portfolios based on their best investment views rather than being restricted to the companies contained in an index. Through this approach, SIM has been able to produce compelling and consistent performance.

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