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Markets and Funds Update 22 August 2011

Markets and Funds Update 22 August 2011. Mark Cliff. The Markets. 500. The Markets. May 2008: March 2009: Mid Feb 2011: 30,195 Friday Close: 26,145. Mid Feb 2011: 30,195 Early August: 23,367 Friday Close: 26,145. Why?. Why? Debt Standoff, then Downgrade.

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Markets and Funds Update 22 August 2011

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  1. Markets and Funds Update 22 August 2011 Mark Cliff

  2. The Markets 500

  3. The Markets

  4. May 2008: March 2009: Mid Feb 2011: 30,195 Friday Close: 26,145 Mid Feb 2011: 30,195 Early August: 23,367 Friday Close: 26,145

  5. Why?

  6. Why? Debt Standoff, then Downgrade

  7. Why? The Growth Horse Won’t Move

  8. Why? Global Debt Concerns

  9. We now live in an environment of fear

  10. All that Glistens? Hedge against inflation Haven in times of crisis

  11. QEIII? Quantative Easing III

  12. Is this 2008 All Over Again? So, the world is a mess but we find ourselves unwilling to panic.  Why is this? Primarily because we can still find good opportunities to provide our investors with good long term returns and, if anything, a market sell-off amplifies those opportunities.

  13. PSG CORE RANGE OF FUNDS

  14. PSG Equity Asset Allocation: The fund does hold some tactical shorts right now (about 10%) Top 10: Anglo, Steinhoff, BHP, MTN, Sasol Tongaat, EOH, Nampak, Tiger, Reunert NB: Adding Global Stocks Commentary: We continue to highlight the difficulty in predicting the outcome and timing of the various risks that could impact financial markets in the years ahead. Accordingly, we continue to invest in a bottom-up fashion .... and expect to deliver good medium-term returns at an attractive margin of safety Performance: YTD flat vs ALSI -1.5 to end of July

  15. PSG Flexible Asset Allocation: 30% cash (22.5% on Friday ), 48% domestic Equity, 23% Foreign Equity Top 10: Steinhoff, Sasol, Berkshire, Anglo American, Tiger, Tesco EOH, Capital Shopping Centres, Reunert, Microsoft Commentary: We were prepared for paniceandhave been waiting for a market decline so that we can invest some of the cash that the fund holds... We also know that we made a couple of fantastic investments during the crisis of 2008/2009. Take away: PSG are definitely buying into this correction

  16. PSG Balanced Asset Allocation: Local Equity 37% (55%), Offshore Equity 21% (14%), Local Cash and bonds 39% (20%), Offshore Cash and bonds 3% (10%) Top 10: Steinhoff, Anglo American, EOH, Sasol, Microsfot, Kagiso Media, Reunert, Tiger, Firstrand, Capevin Take away: The fund has been conservatively positioned and buying into the correction as per the PSG house view. Note: Fund size now R1,017billion.

  17. PSG Global Equity Geographical: US 49%, EU ex UK 22%, UK 15%, Other 9%, Cash 5% Top 10: Microsoft, Tesco, Dell, Unilever, Alstom, IBM, Encana, Vinci, Heineken, Mitsubishi Preferences: Investments in industries with stable, staple-like businesses with rock-solid balance sheets. Take Away: Avoiding banks and weak-balance sheet areas, holding stable, staple counters, was cash-high at month-end which has been deployed

  18. New Kids on the Block

  19. 21 Coming later today How PSG are handling the markets

  20. Consistent Conservative Contrarian Questions?

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