Absa unit trust success proves patience pays

You don’t need to go on a high-risk rampage to win Raging Bull recognition for top unit trust performance. A sober, patient strategy can also rack up a hatful of accolades for exceptional gains, judging by the success of the Absa Select Equity Fund at last night’s (Wednesday, January 27) Raging Bull awards.

The flagship unit trust from the Absa Investments stable won honours in three strongly contested categories – for best broad-based domestic equity fund on a straight performance basis, for best domestic equity general fund and for best domestic general equity fund on a risk-adjusted basis.

The fund is managed by Errol Shear, Chief Investment Officer of Absa Asset Management. He noted: “The accolades have special significance, coming as they do after a period of extreme volatility and deep declines in market value.

“The fund follows an essentially conservative strategy and avoids high risk tactics. It appeals for those prepared to take a long view.

“Our success is therefore a reminder that equity markets should not be treated as a casino for aggressive players out for a quick win. Equity growth accrues to those prepared to commit to the long haul. Wealth is enhanced by prudence.

“It is important to get this message across, and the Raging Bull awards night made the ideal platform.”

Despite a market meltdown in 2008 and early 2009, unit trust industry figures show that the Absa Select Equity Fund achieved an annualised five-year return of 22.72% while the three-year return reached 10.82%.

The R745 million fund was feted at the Cape Town awards event for consistent success in pursuit of its mandate of trying to top the JSE All Share Index by more than 2.5% a year.

The Absa Select Equity Fund is known for a pragmatic value-oriented approach and seeks out-performance by selective stock-picking. The accent is on quality companies, though some interesting small-cap stocks frequently liven up the mix. Constant research and active management help to contain downside risk.

The Absa Balanced Fund also received a Raging Bull, topping its category as best domestic asset allocation prudential medium equity fund. The fund is managed by Errol Shear.