QUARTERLY UNDERLYING FUND COMMENTARY · 6 Market Cap Performance Over the Year Source:...

QUARTERLY UNDERLYING FUND COMMENTARY South African Edition

June 2020

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CONTENTS Building Block Snapshot ........................................................................................................................................................................... 3

Local Equity ................................................................................................................................................................................................... 4

Underlying Fund Performance ....................................................................................................................................................... 4

Fund Changes Over the Year .......................................................................................................................................................... 5

Underlying Fund Commentary ....................................................................................................................................................... 6

Local Bonds ................................................................................................................................................................................................... 9

Underlying Fund Performance ....................................................................................................................................................... 9

Fund Changes Over the Year ........................................................................................................................................................ 10

Underlying Fund Commentary ..................................................................................................................................................... 11

Local Cash and Stable Income Assets ................................................................................................................................................ 12

Underlying Fund Performance ..................................................................................................................................................... 12



Local Property ............................................................................................................................................................................................. 15




Global Equity ............................................................................................................................................................................................... 18




Global Bonds ............................................................................................................................................................................................... 24




Global Property .......................................................................................................................................................................................... 25




Disclaimers .................................................................................................................................................................................................. 30

Minimum Disclosure Documents ......................................................................................................................................................... 30

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BUILDING BLOCK SNAPSHOT

Source:

Benchmark Descriptions

SA Equity: FTSE JSE Capped Shareholder Weighted Index, SA Bonds: FTSE/JSE All Bond Index, SA Income: STeFI + 1%, SA Property: FTSE/JSE All Property Index, Global Equity: MSCI ACWI, Global Bonds: Bloomberg Barclays Global Aggregate Index, Global Property: FTSE EPRA Nareit Developed Rental Index

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25.6

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9.9%

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SA Equity SA Bonds SA Income SA Property Global Equity Global Bonds Global Property

Building Block Performance Over the Quarter

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SA Equity SA Bonds SA Income SA Property Global Equity Global Bonds Global Property

Building Block Performance Over the last 1 Year

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LOCAL EQUITY

UNDERLYING FUND PERFORMANCE

Note: The performance and commentary presented for this Fund of Funds (FoF) are subject to the disclaimers provided at the end of this document. Please refer to the PortfolioMetrix BCI Equity FoF’s Minimum Disclosure Document for full performance history. This is also made available at the end of this document.

Source: PortfolioMetrix, FinXL


-20.00%

-15.00%

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FTSE JSE CappedShareholder

Weighted All Share

BCI PortfolioMetrixBCI Equity Fund of

Funds

BCI 36ONE BCI SAEquity

Coronation Top 20 Fairtree EquityPrescient

Laurium EquityPrescient

Ninety One Equity Satrix Mid Cap

12 Month Performance

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FTSE JSE SWIX and Fund Performance

FTSE JSE Capped Shareholder Weighted All Share BCI PortfolioMetrix BCI Equity Fund of Funds BCI 36ONE BCI SA Equity

Coronation Top 20 Fairtree Equity Prescient Laurium Equity Prescient

Ninety One SA Equity Satrix Mid Cap

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FUND CHANGES OVER THE YEAR

1. In June 2019 the PortfolioMetrix BCI Equity FoF increased its exposure to the Satrix Mid Cap Index and decreased its allocation to 36One’s BCI SA Equity Fund by 5%. These changes were carried out to increase the FoF’s overall exposure to Mid-Cap stocks.

2. In January 2020, allocations to Coronation, Fairtree, Ninety One and Laurium were equalised to +/-19.5%. Meaning Coronation and Fairtree were reduced, whilst Ninety One and Laurium were increased. We also lightened our exposure to Satrix Midcap and 36One. The changes to Fairtree & Satrix were to decrease our FoF’s look through exposure to Platinum group metals. Ninety One and Laurium were being held as a junior positions due to minor concerns relating to team and process changes, these concerns are now alleviated.

3. In early March 2020, we made a small tactical allocation to the Satrix SA property index fund within our Equity FoF. Because of COVID-19 and the lockdown’s associated effects on the economy the outlook for the sector rapidly and fundamentally changed. We therefore exited the position.

4. In Q2 2020, we continued to temper our exposure to the Satrix Midcap Index, reducing its target weight to our “neutral” allocation of 10%. This decision was made because of the index’s composition which is disproportionately tied to the well-being of the local economy.

Super Sector Performance Over the Year


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FTSE JSE SWIX and Super Sector Performance

FTSE JSE Capped Shareholder Weighted All Share FTSE/JSE Financial FTSE/JSE Industrial FTSE/JSE Resources

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Market Cap Performance Over the Year


UNDERLYING FUND COMMENTARY

PortfolioMetrix BCI Equity FoF

Summary

• The PortfolioMetrix BCI Equity FoF outperformed by 2.6% over the past 12 Months (-6.1% vs -3.5% for the FoF) relative to its FTSE/JSE Shareholder Weighed Index (SWIX), benchmark,

o Over the quarter the FoF outperformed by 3.5%, as the index rallied 22.1% and the FoF generated 25.6%

• The PortfolioMetrix BCI Equity FoF outperformed by 8.0% over the past 12 Months (-11.5 vs -3.5% for the FoF) relative to its FTSE/JSE Capped Shareholder Weighed Index (SWIX) future benchmark,

o Over the quarter the FoF outperformed the Capped SWIX by 4.2%, as the index rallied 21.3% and the FoF returned 25.6%

o This benchmark is changing because of concentration issues in the SWIX. • The strong recovery in equity markets over the quarter follows the equally sharp drawdown experienced

in Q1 which was caused by economies entering hard lockdowns to battle the coronavirus. Whilst we are by no means out of the woods, the shape of this recovery when viewed on a chart is seemingly “V” shaped.

• The expediency of the market crash and recovery has been unprecedented. Markets have breached levels in days, which in previous market crises took months if not years to reach or recover from.

• South Africa has been in lockdown with varying degrees of severity throughout the quarter. The impact of this on the domestic economy and stock market will be dire.

• Notable stock specific headlines include: o Naspers & Prosus: the fortunes of these companies are closely tied to a Chinese company known

as Tencent. Tencent has benefitted from Covid-19 and the new way of life the world finds itself in as its business model is primed for customers working from home and the uptick in gaming due to social distancing.

o Numerous Gold Shares have hit 14-year highs. Uncertainty surrounding COVID-19, geopolitical tensions and concerns relating to the outlook for inflation have caused a “flight to safety” into gold. The gold price reached a near all-time high, ending the quarter at $1782/ounce.

o The Sasol share price has rallied 155% over Q2. This follows an extremely tumultuous Q1, wherein the company struggled to remain a going concern. The company’s earnings are

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FTSE JSE SWIX and Market Cap Indices Performance

FTSE JSE Capped Shareholder Weighted All Share FTSE/JSE Small Cap FTSE/JSE Mid Cap FTSE/JSE Top 40

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dependent on the oil price and this went negative in Q1, before recovering to $41.15/barrel of Brent crude at the end of Q2.

Detail

South African equities have experienced a strong recovery since the COVID-19 market sell-off bottomed out in the middle of March. From a capitalisation perspective, all segments of the market have rallied strongly over the quarter. Large-caps gained 24.2%, small-caps 17.2% and Mid-caps lagged, but still posted an impressive 15.4%. Over the past year things are not so rosy, large-cap stocks have essentially gone nowhere, losing -0.6%, whilst mid and small-cap are down a rather alarming -17.6% and -22.9% respectively. Shifting attention to the market’s super sectors, the last year has been dire for Financials, the sector is down -34.5%, Resources have gained 12.4% and Industrials have offered a meagre 4.0%. Over the quarter Financials, Industrials and Resources were up 12.9%, 16.6% and 41.2% respectively.

Source: Financial Express

Underlying funds over the quarter produced the following relative returns vs the Capped SWIX Index (note the FoF’s is however currently benchmarked to the SWIX Index):

• 36One BCI SA Equity*: Outperformed by 2.0% • Coronation Top 20**: Underperformed by -1.5% • Fairtree Equity Prescient*: Outperformed by 19.2% • Laurium Equity Prescient*: Outperformed by 4.1% • Ninety One (formally Investec) SA Equity*: Outperformed by 1.8% • Satrix Mid-Cap Index***: Underperformed by -6.3%

* officially benchmarked to the FTSE/JSE Capped SWIX Index

** officially benchmarked to the FTSE/JSE Capped All Share Index

*** officially benchmarked to the FTSE/JSE Mid-Cap Index

The South African stock market is often reffered to as a global investment microcosm. This analogy is drawn due to the fact that many companies listed on the JSE generate the bulk of their revenue outside of the country (Rand hedge stocks). Given the rather dire state of our domestic economy, the prospects for any company solely reliant on revenue generated within the country is extremely lacklustre (SA Inc.). In the commentary below, you will see that this sentiment is shared broadly by our underlying managers. That said our managers are seeing pockets of opportunities in select SA Inc. stocks and they acknowledge that they need to invest in this space to balance their portfolios. Below is a lookthrough breakdown of our Equity FoF’s geographical revenue exposure as at 30/06/2020.

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Region Exposure Developed ex-UK 38.73%

Emerging ex-SA 20.92%

SA 29.56%

Africa 3.86%

UK 4.12%

ZAR - Cash 1.30%

Unclassified 1.52% Source: PortfolioMetrix, Coronation, Fairtree, Laurium, 36One, Ninety One, Satrix

Ninety-One are fairly optimistic on the outlook of domestic equities over the medium term. However, they are seeing disparity across the market and state that correctly positioning in sectors and stocks based on valuations and earnings expectation is paramount. This is particularly true with respect to companies which generate the bulk of their revenue in SA. That said, across the market, they are seeing attractive valuation-based opportunities, which prior to the COVID market crisis had been trading at unjustifiable premiums to historical averages.

Laurium’s outperformance over the past year has been generated by Naspers/Prosus and Resource companies like BHP, Impala, Sibanye and Anglo American. Whilst key detractors include Sasol, SA Banks (ABSA, Nedbank & Standard Bank) and positions in SA Property. The fund is underweight SA Inc, but they are selectively adding to positions that exhibit strong cashflow and balance sheets. Sifting through the market for opportunities with sufficient upside and margins of safety is important. Recent additions to the portfolio include investments in Multichoice, Growthpoint and Netcare.

Coronation have been reviewing every assumption feeding into their financial models to unearth value, given everything that has transpired in the world. They acknowledge that there is a risk of being too pessimistic and it is important to temper this pessimism. The team are focussing on finding quality businesses that can generate top line growth, curtail costs and are being led by exceptional management teams. Performance contributors include Platinum and Diversified miners, Naspers/Prosus and Aspen. Recent portfolio additions include Glencore and Woolworths. SA Inc. exposure is made up of SA banks and more defensive business such as food retailers and hospitals.

36One are arguably the most pessimistic on the outlook for SA Inc. Alluding to government’s ill-disciplined budgeting and the scary levels the country’s debt to GDP ratio is approaching. Overweight positions in Gold Fields, Impala Platinum, Naspers and AngloGold contributed positively to relative performance. Whilst the largest detractors were underweight positions in Sasol, BidCorp and Anglo American. The team haven’t made any major changes over the quarter but have been trimming gold stocks as the commodity has rallied.

Fairtree have had an exceptional quarter from a performance perspective. They remain exceptionally bullish on their resources positioning and this has been the main performance contributor within their fund. They have held a significant overweight to the super sector throughout the quarter touting the diversified drivers of revenue and supportive commodity prices. Key performance detractors YTD include Foschini’s, Fortress B and Investec. Fairtree share the same pessimistic outlook for SA Inc. shares but remain vigilant to opportunities.

Satrix, is a passive implementation of the FTSE/JSE Midcap index and has performed in line with its benchmark. This postion is held to harvest the illiquidity premium, which is a well documented market factor. The index is however disproportionately exposed to companies which fall into the SA Inc. bucket and this has dictated the index’s performance over the course of the quarter and year. Opportunely, the allocation therefore diversifies the pessimisim being expressed by our active managers, it just needs to be sized appropriately.

Underlying Managers and Holdings

Below is the look-through of the top ten stock weights of the PortfolioMetrix BCI Equity FoF as at 30/06/2020. The respective top ten holdings of each underlying manager are also provided.

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Source: PortfolioMetrix, Coronation, Fairtree, Laurium, 36One, Ninety One, Satrix

LOCAL BONDS


Note: The performance and commentary presented for this FoF are subject to the disclaimers provided at the end of this document. Please refer to the PortfolioMetrix BCI Bond FoF’s Minimum Disclosure Document for full performance history. This is also made available at the end of this document.

Name Weight

1 NASPERS 12.53%

2 PROSUS NV 5.50%

3 ANGLO AMERICAN 5.32%

4 IMPALA PLATINUM HOLDINGS 4.82%

5 BRITISH AMERICAN TOBACCO 4.76%

6 STANDARD BANK 3.18%

7 ANGLOGOLD ASHANTI 3.04%

8 NORTHAM PLATINUM 2.62%

9 BHP 2.57%

10 MTN 2.49%

Total 46.82%

PMX

Name Weight Name Weight Name Weight

NASPERS 16.05% NASPERS 16.88% IMPALA PLATINUM HOLDINGS 9.09%

BRITISH AMERICAN TOBACCO 8.43% ANGLO AMERICAN 10.56% NASPERS 8.91%

PROSUS NV 5.66% BRITISH AMERICAN TOBACCO 8.35% ANGLOGOLD ASHANTI 6.97%

ZPLP PREF SHARE 4.33% IMPALA PLATINUM HOLDINGS 5.79% NORTHAM PLATINUM 6.50%

ANGLO AMERICAN 3.92% STANDARD BANK 5.77% PROSUS NV 6.15%

IMPALA PLATINUM HOLDINGS 3.88% PROSUS NV 5.14% AFRICAN RAINBOW MINERALS 5.92%

S. African Rand Spot 3.46% QUILTER 5.07% SIBANYE STILLWATER 4.74%

SIBANYE STILLWATER 3.44% ASPEN PHARMACARE 4.95% HARMONY GOLD MINING CO 4.18%

GOLD FIELDS 3.22% SHOPRITE HOLDINGS 4.93% ANGLO AMERICAN PLATINUM 3.61%

ANGLOGOLD ASHANTI 3.17% NEDBANK 4.77% MR PRICE 3.22%

Total 55.55% Total 72.22% Total 59.29%

Fairtree Equity Prescient36One SA Equity Coronation Top 20

Name Weight Name Weight Name Weight

NASPERS 14.63% NASPERS 14.73% ASPEN PHARMACARE 6.06%

PROSUS NV 6.84% BRITISH AMERICAN TOBACCO 6.80% CLICKS 5.50%

ANGLO AMERICAN 6.26% PROSUS NV 6.66% MULTICHOICE 5.17%

BHP 5.30% BHP 6.18% GROWTHPOINT PROPERTIES 4.51%

FIRSTRAND 5.19% ANGLO AMERICAN 6.14% NORTHAM PLATINUM 4.44%

BRITISH AMERICAN TOBACCO 4.79% MTN 4.49% MR PRICE 4.08%

SANLAM 4.39% ANGLOGOLD ASHANTI 4.10% SPAR 3.69%

IMPALA PLATINUM HOLDINGS 3.87% STANDARD BANK 4.09% EXXARO RESOURCES 3.62%

STANDARD BANK 3.24% ABSA 3.67% HARMONY GOLD MINING CO 3.38%

SIBANYE STILLWATER 2.97% NEDBANK 3.43% TIGER BRANDS 3.25%

Total 57.48% Total 60.29% Total 43.69%

Ninety One SA Equity Satrix Mid Cap IndexLaurium Equity Fund

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Fund Changes Over the Year

1. On 23 June 2020, the PortfolioMetrix BCI Bond FoF completely disinvested from the Stanlib Bond fund in favour of the Ninety One Gilt fund. This was not done because of any concerns with the Stanlib Fixed Income franchise or the team. The decision was driven primarily because of cost. In our view there is little difference between the houses in resources, the quality of the teams, the institutional rigour of their fixed income processes and product and they are both lenders of choice to issuers. Given this, and on the basis of all else being equal, we decided to make use of the option that was more competitively priced. The trade was done as a scrip transfer resulting in no cash drag when executing the transaction.

All Bond Index and Fund Performance over the Year


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Coronation Bond STANLIB Bond Ninety One Gilt STANLIB Income


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All Bond Index and Fund Performance

All Bond PortfolioMetrix BCI Bond Fund of Funds Coronation Bond Ninety One Gilt STANLIB Bond STANLIB Income

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SA 10 Year Yield over 12 Months

Source: Bloomberg


PortfolioMetrix BCI Bond FoF

Summary

• The PortfolioMetrix BCI Bond FoF outperformed the JSE All Bond Index (ALBI) over the year by 1.1% (the index returned 2.9%)

o Over the quarter the fund underperformed by 0.5% as the ALBI recovered 9.9% and the fund lagged with a return of 9.4%

• Coronation has generally underperformed the index over the last year and quarter due to an overweight position in the longer end of the yield curve

• Performance from Stanlib has been good, outperforming the index over the last year and quarter • The Ninety One Gilt fund was included towards the end of the quarter and would have had minimal effect

on the performance of the building block • The yield curve has steepened significantly as rates on the short end fell substantially whilst the longer

end of the curve remains elevated due to longer term concerns around government debt metrics

Detail

The South African (SA) supplementary budget (24 June) revealed some sobering but expected realities for the SA economy and the resultant effects on government finances. Some key points from the supplementary budget are as follows:

• Revenue shortfall of R304bn • Budget deficit expected to be 14.6% • Debt to GDP expected at 81.8% • GDP for 2020 expected at -7.2% • Inflation expected to be 3%

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South Africa 10 Year Yield

R186 SA 10Year

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The picture painted to debt investors in SA is a bleak one. The country is teetering on a debt trap and significant risks remain longer term for South Africa and the state of government finances.

The South Africa Reserve Bank (SARB) slashed its key repo rate by 50bps to 3.75% during its May meeting. The move followed a 100bps rate cut in April’s emergency meeting, bringing borrowing costs to its lowest level on record, amid the coronavirus crisis. The total cut to the repo rate year-to-date is 275 bpts with a further 25bpts expected in July. This has dragged down the shorter end of the yield curve in general which is typically tethered to SARB movements.

The 12 year plus area of the yield curve, however, has continued to underperform (yields have remained high) due to the deterioration of government finances and public sector borrowing requirements. Markets have priced in a significant risk premium in the longer end as investors are sceptical of the willingness and ability of government to execute on much needed structural reform in the country.

The South African 10-year trades at around 9.5% implying a real yield above inflation of 6 – 7%. These real yields are commensurate to those expected from equities over the long term and illustrate quite clearly the discount the market demands on longer term government debt due to the poor fiscal outlook.

Given the adjustments to the shorter and longer end of the yield curve, SA now has the steepest yield curve in the EM universe. This implies significant value to offshore (and local) investors should the environment change.

Fund positioning of underlying managers is quite interesting right now and thankfully complementary. Coronation are taking a more contrarian view and see value in the longer end of the yield curve despite the risks to the fiscus. Their view is that the steepness of the yield curve compensates for the risk being taken and point out that the 15-year area of the yield curve is at its steepest relative to the 10-year yield ever (above 1.5%). The margin-of -safety priced in gives them comfort in their relative overweight in this area. That said they remain concerned around implementation risks and are therefore neutrally positioned on an overall duration perspective. Coronation have a higher weighting to government issued debt than Ninety One with 81.4% exposure to government and SOE’s. Ninety One are more conservative on their yield curve positioning with a higher weight to the belly of the curve. The fund has gone neutral on duration given risks, but has started increasing its allocation in the portfolio to investment grade credit. Exposure to the cyclical sectors of the economy remain minimal with the managers preferring quality defensives; namely banks, insurers, and especially government-guaranteed debt as well as large blue-chip corporates with strong balance sheets. The Ninety One team sold down their credit exposure significantly heading into the pandemic, but are now comfortable to ease their way back in. Below is a summary of the fund’s duration exposures and yield curve positioning:

LOCAL CASH AND STABLE INCOME ASSETS


Note: The performance and commentary presented for this FoF are subject to the disclaimers provided at the end of this document. Please refer to the PortfolioMetrix BCI Income FoF’s Minimum Disclosure Document for full performance history. This is also made available at the end of this document.

Coronation Ninety One

Modified Duration 6.7 6.8

0 - 1 years 2.5% 4.5%

1 - 3 years 4.2% 11.4%

3 - 7 years 9.4% 24.9%

7 - 12 years 22.9% 16.8%

12 years + 61.0% 42.4%

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*Note: The BCI Income Plus fund is managed by Fairtree


1. In late April/early May the following changes were made: a. Introduced the Matrix Novare Stable Income Fund, a detailed investment case can be found here:

"C:\Dropbox (PMX)\PMXSA Adviser Documents\1. Local Portfolios\2. Multi - Managed Profiles\c) Underlying Investment Cases and Fact Sheets\Local Cash & Stable Income Assets\Investment Cases\IC Matrix Novare Stable Income Fund.pdf"

b. Introduced the Ninety-One Diversified Income Fund, a detailed investment case can be found here: "C:\Dropbox (PMX)\PMXSA Adviser Documents\1. Local Portfolios\2. Multi - Managed Profiles\c) Underlying Investment Cases and Fact Sheets\Local Cash & Stable Income Assets\Investment Cases\IC Ninety One Diversified Income Fund.pdf"

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STeFi + 1% PortfolioMetrix BCIIncome Fund of Funds

BCI Income Plus Coronation StrategicIncome

Nedgroup InvestmentsFlexible Income

Ninety One DiversifiedIncome

Novare Matrix NCISStable Income


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STeFI and Fund Performance

STeFi + 1% PortfolioMetrix BCI Income Fund of Funds BCI Income Plus

Coronation Strategic Income Nedgroup Investments Flexible Income Ninety One Diversified Income

Novare Matrix NCIS Stable Income

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c. Reduced allocations to the Nedgroup Flexible Income and BCI Income Plus fund, stemming from developments surrounding Landbank and its default. Allocations to the BCI income Plus fund were also reduced due to concerns relating the health of SA’s credit landscape. Our allocation to the Coronation Strategic Income fund was reduced slightly to free up space for the new funds we were including.


Summary

• The PortfolioMetrix BCI Income FoF returned 4.7% over the past 12 months, underperforming both cash, measured by STEFI (6.9%), and the official FoF benchmark of STEFI + 1% (8.0%)

o The FoF’s disappointing return is attributable to Q1 2020, the FoF lost -2.5%, vs a 2% gain for the STEFI + 1% benchmark.

o However there has been strong recovery in Q2 2020, the fund returned 3.9% vs a 1.7% gain for the STEFI + 1% benchmark.

• The Multi-Asset Income ASISA category is not a risk-free asset class and should never be considered as such. Negative relative and even absolute performance should always be expected

• There are growing concerns relating to a potential liquidity squeeze and/or unprecedented set of defaults occurring in the South African credit market. Investing in sound issuances and maximizing diversification is paramount

• The SARB has aggressively cut cash rates by 275 bps, over the course of the year in an effort to support the economy in the face of the COVID pandemic.

• Tito Mboweni, in a special budget detailed the very bleak state of our countries fiscus. Spending cuts and wage reductions were announced, but more clarity is expected in October’s Medium-Term Budget Policy Statement (MTBPS).

Detail

As stressed in every previous quarterly communique the potential for underperformance relative to benchmark in low risk asset classes like cash and stable income should not be ruled out. The FoF and underlying strategies had a strong resurgence in Q2, following the unprecedent drawdowns experienced in Q1 due to the Coronavirus pandemic. It is important to remember that STEFI+1% is essentially risk-free. In contrast, the PortfolioMetrix BCI Income FoF falls into the Multi-Asset Income ASISA category, which invests in a spectrum of equity, bond, money market and real estate instruments with the primary objective of maximising income. As such, it is far from a risk-free asset class.

Underlying funds over the quarter produced the following relative returns (vs STEFI+1%):

• BCI Income Plus: Outperformed by 2.7% • Coronation Strategic Income: Outperformed by 2.7% • Nedgroup Flexible Income: Outperformed by 1.2% • Matrix Novare Stable Income*: Outperformed by 2.1% • Ninety One Diversified Income*: Outperformed by 1.3%

* Funds not held for the entire quarter

The Coronation Strategic Income fund manager acknowledges that the local economic backdrop is concerning, but that valuations towards the end of Q1 were considerably cheaper, offering numerous opportunities. In what has already been an extraordinary year, they still see the landscape being volatile and treacherous going forward. Asset prices have started to recover, particularly in global markets where economies are starting to emerge from hard lockdowns. As such the fund is maintaining a healthy exposure to global assets. The fund continues to have a sizable exposure to NCD instruments, but they remain cautious and selective in this space. SA Government bonds are offering a decent risk premium and at least justify a neutral allocation. Listed property through the COVID market crisis has been the biggest detractor to the fund’s performance, but the fund managers are still seeing

15

value in select large cap counters. The fund is carrying exposure to high quality corporate preference shares but is not looking to add to this. The fund is currently yielding 6.5% (gross of fees).

Abax Investments, who manage the Nedgroup Flexible Income fund have focussed on diversification across all components of their diversified alpha strategy. Credit quality is focused in higher quality issuances. The team have been increasing their exposure to Inflation Linked Bonds, deeming the country’s inflationary outlook as being favourable to these instruments. Domestic Property exposure is at historic lows within the portfolio, the outlook is still dire. However, given how cheap the stocks have become, they are selectively adding to counters which have less leveraged balance sheets. Offshore exposure is predominately focussed in hard currency debt issued by local institutions/companies with a total net exposure +/- 5.8% in the portfolio. The fund is projecting a yield of 6.8% over the next year.

The Fairtree team are running a barbell type strategy focussed on investing in high yielding illiquid credit, coupled with liquid instruments to facilitate cashflow requirements. This is meticulously managed by a quantitative model, which allocates flows and trades to best meet the objectives of the portfolio. The PortfolioMetrix investment team spent time with the architect of this system in early June, seeing the nitty gritty of how the system works. The portfolio has a weighted average maturity of 2.8, vs 2.4 last quarter. Given the turbulent market environment and niche strategy, diversification continues to be prioritised, the fund currently contains more than 150 unique investment instruments. With approximately 26% of the fund being invested in offshore instruments, hedged back to rands.

The Ninety-One Diversified Income fund has not been part of the building block for the full quarter, it was introduced in early May. Performance over the quarter has been driven by, duration positioning in mid-dated bonds, the bounce in listed property and yield enhancing corporate bond allocations. Performance detractors included underweight positions in inflation-linked bonds (which they are looking to neutralise) and forex positioning around the USD (which was on the backfoot for most of the quarter). The team are seeing valuation-based opportunities in SA Government Bonds. They continue to be strategically underweight listed property. And they are cautiously adding to Investment grade credit.

The Matrix Novare Stable Income fund has also only been in the building block for the past two months. The strategy is straight forward in the sense that they strive to harvest a structurally entrenched return premium which is available in our domestic market. Performance for the quarter was attributable to government bond positions early in the quarter and the incremental performance of bank NCDs. The team have recently lowered their exposure to fixed rate government bonds, due to a strong rally early in the quarter. They have also chosen to maintain their neutral duration position of 1.2.

LOCAL PROPERTY


Note: The performance and commentary presented for this fund are subject to the disclaimers provided at the end of this document. Please refer to the PortfolioMetrix BCI SA Property Fund Minimum Disclosure Document for full performance history. This is also made available at the end of this document.

16



Please note: The ABSA Property Equity Fund has a slightly less constrained mandate than the one we are using in our fund. Effectively, we restricted the cash position within the segregated mandate managed by ABSA to 10%. In their unit trust they can have a maximum 20% in cash. There are also fee differences between what we have in our fund and the retail unit trusts offered by the managers.


None

-45.00%

-40.00%

-35.00%

-30.00%

-25.00%

-20.00%

-15.00%

-10.00%

-5.00%

0.00%

FTSE/JSE SA Listed Property PortfolioMetrix BCI SA Property Sesfikile BCI Property Absa Property Equity


30

40

50

60

70

80

90

100

110

28/06/19 28/07/19 28/08/19 28/09/19 28/10/19 28/11/19 28/12/19 28/01/20 28/02/20 28/03/20 28/04/20 28/05/20 28/06/20

JSAPY and Fund Performance

FTSE/JSE SA Listed Property PortfolioMetrix BCI SA Property Absa Property Equity Sesfikile BCI Property

17


PortfolioMetrix BCI SA Property

Summary

• The fund has been defiant over a period of deep drawdowns and escalated risk in the local property sector. The PortfolioMetrix fund generated alpha of:

o 9.86% over the past year o 2.03% over the last quarter

• The portfolio remains diversified and specialist-managed in an environment that requires a careful step. • The Benchmark rebounded in the second quarter by more than 20%, but despite this remained in deep

negative territory when measured over the past 12 months with a total return of -39.73%. • Extended economic lockdown placed extreme pressure on SA retailers and the broader economy, despite

this, rental collections fared a little better than initially anticipated in the first quarter. • INTU stock was finally suspended as the UK property owner failed to raise capital or structure a deal to

escape a mountain of debt and collapsing asset valuations.

Detail

The South Africa Listed Property sector is represented by a concentrated index, but it fortunately also has a large offshore contingent through the likes of NEPI Rockcastle. This has perhaps been a saving grace to investors who have held meaningful exposure to this asset class. Despite this rand “shock-absorber” the index has fallen, and just as things begin to look like they have stabilised, the index falls a little further. The asset class is attractive on a yield basis, but caution needs to be shown when simplifying “value” since there is a lot of risk to actually receiving the forecast dividends, this became apparent during the quarter as many listed property companies withdrew their guidance on earnings and dividend payments.

Further to the guidance withdrawals, the companies face various threats to their businesses:

• Revenue: Rental collections have been well below their contractual rates (fortunately there was a slightly higher collection rate than the pessimism in the first quarter suggested),

• Valuations: Asset valuations are under threat of being lowered (inline with a weakening economy and lower earnings potential), this threatens company loan-to-value and other covenant metrics,

• Operating Environment: the current South African economy and the consumer in particular offer little growth prospects for many of these companies, paired with a flailing Eskom and exceptionally high unemployment and the situation seems dire.

These risks (to varying degrees) have been playing out with INTU in the UK, which saw its shares suspended in late June after it failed to raise capital or structure a deal to help it manage its debt burden (amongst other regressing factors). INTU entered a downward spiral and perhaps acted too late, serving as a stark reminder to many local companies that business failure is a possibility. Although holding the company in the past investors did not have exposure to INTU during this period.

The situation is not an inspiring one, but before these risks overwhelm our emotions let’s ask ourselves what the risk/reward ratio looks like on a forward-looking basis. What is in the price is also important as this can lead to better risk/reward prospects where the business is a going concern. Both our specialist managers follow different approaches to this problem and when combined provide an investor-friendly return profile. Over the past quarter the underlying produced the following relative returns (vs the SAPY):

• ABSA Property: Outperformed by 6.08% • Sesfikile Property: Underperformed by 1.04%

Both managers have retained a fair level of cash in their portfolios and as well as their overweight offshore exposure to the likes of NEPI, Lighthouse Capital, Equites and Capital & Counties. The rationale here is twofold:

1. The rand fall-out acts as a buffer to a weak operating environment,

18

2. The economic impact and resulting rebound in the offshore markets has been significantly better than that experienced thus far in South Africa.

Of course, the lasting impact of COVID-19 will manifest in real estate in a couple of ways such as remote working and online retail. These structural shifts both require increased infrastructure such as logistics warehousing, improved housing, and datacentres. The other side of the story will likely be reduced retail space and office requirements (this last point will be the result of either businesses rationalising workspace and headcounts, as well as permanent closures).

GLOBAL EQUITY


Note: The performance and commentary presented for this FoF are subject to the disclaimers provided at the end of this document. Please refer to the PortfolioMetrix BCI Global Equity FoF’s Minimum Disclosure Document for full performance history. This is also made available at the end of this document.


-20.00%

-10.00%

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%


19



1. LF Miton European Opportunities added to the fund: We have both qualitative and quantitative conviction in LF Miton European Opportunities, run by Carlos Moreno and Thomas Brown. The fund invests in quality growth companies (those with a competitive edge and wide moats). The fund has an OCF of 0.84%. The fund will be used to complement the existing implementations in the European region and to lower concentration risk to Jupiter. The fund first entered the portfolio at the end of February 2020

2. M&G Global Listed Infrastructure fund: Listed infrastructure can be described as a hybrid between global equities and more defensive long-term assets, primarily characterised by the source and defensive nature of the company’s cash flow. The steady stream of cash flows produces a more defensive asset class without compromising on growth prospects and as such is complementary in an equity portfolio; the historically lower level of beta, lower drawdowns and similar recovery profile supports this assertion. PortfolioMetrix wanted to include the asset class for diversification purposes and was able to get access to the founder share class of the M&G fund at a very competitive price of 0.55%. The unique way in which M&G views and implements the asset class coupled with the low cost attracted us to the proposition. The first trade into the fund was on 19 May 2020

3. Satrix MSCI World Equity Feeder: This fund was included for cash management purposes in the fund of funds. This is a ZAR denominated feeder fund that sets out to track the MSCI World Index. The fund is competitively priced and will be used for unexpected cash flow requirements.


PortfolioMetrix BCI Global Equity FoF

Summary

• The PortfolioMetrix BCI Global Equity FoF returned 18.1% over the past year in rand terms. This underperformed the MSCI ACWI which returned 25.8%

• Asset Class Total Returns and Asset Class Relative Returns to MSCI ACWI (in rands) are shown below:

85

90

95

100

105

110

115

120

125

130

135

28/06/19 28/07/19 28/08/19 28/09/19 28/10/19 28/11/19 28/12/19 28/01/20 28/02/20 28/03/20 28/04/20 28/05/20 28/06/20

MSCI All Country World Index and Fund Performance

MSCI ACWI BCI PortfolioMetrix BCI Global Equity Fund of Funds MSCI World MSCI Emerging Markets

20

• Fund Excess Returns over their Regional Benchmarks are shown below:

Source:

Detail

Much has been written and said about the dislocations in global equity markets; these seemed to have stretched further this past year and indeed this quarter. We have seen the dislocations play out in several ways. First it has been a value and growth story, the value factor having underperformed since around 2006 and its underperformance accelerating year-to-date (YTD). We have seen it regionally where the US stock market has persistently outperformed sine the 2008 Global Financial Crisis (GFC). We have also seen it more recently in the size factor as smaller stocks have been battered and mega caps have powered on driving concentration in traditional market capitalisation weighted indices. However, the divergence of sector performance is stark, and this has really driven all other factors along with it.

What concerns us is the concentrated nature of these divergences. This can be shown in several ways but for simplicity we include the chart below:

31.5%29.0%

26.8% 26.5%

19.4%

14.1%

7.5%

1.4%

-6.5%

-16.7%

18.2%14.6%

8.6%

16.1% 14.5%

7.5%

16.9%

4.9%

16.5% 15.9%

-20%

-10%

0%

10%

20%

30%

40%

North AmericaEquity

EM Asia Equity Japan Equity DevelopedMarkets

Europe ex-UKEquity

ListedInfrastructure

Pacific ex JapanEquity

UK Equity EM Europe Equity EM Latin AmericaEquity

Asset Class Total Returns

1 Year

Q2 2020

5.9%

-6.2%

-24.2%

1.2%

-18.1%

-11.5%

0.9%3.4%

-32.1%

-42.2%-50%

-40%

-30%

-20%

-10%

0%

10%

North AmericaEquity

Europe ex-UKEquity

UK Equity Japan Equity Pacific ex JapanEquity

ListedInfrastructure

DevelopedMarkets

EM Asia Equity EM Europe Equity EM Latin AmericaEquity

Growth Assets

Asset Class Relative Returns versus Broad Asset Class Benchmark

1 Year

Q2 2020

20.9%

10.9% 8.9% 7.3% 4.6% 3.2% 0.0%

-0.2% -0.9% -1.8% -2.4% -3.0%-8.4%

-12.8%

-23.6% -25.3%-30%

-20%

-10%

0%

10%

20%

30%

Excess Return over the Fund's Regional Benchmark

1 Year

Q2 2020

21

Source: https://www.theice.com/fangplus

The FANG+ Index is an index of the following companies – Facebook, Amazon, Apple, Netflix, Google, Alibaba, Baidu, Nvidia, Tesla, Twitter. We can see from the above that the FANG+ Index has significantly outperformed the broader market and has even outpaced the general Information Technology sector significantly.

Below we look at the MSCI North American Index Top 10 as at 30 June 2020:

The MSCI ACWI Index (global benchmark) has the following top 10:

https://www.theice.com/fangplus

22

From the above we can see that there is a lot of overlap between the FANG+ Index, the MSCI North America Index and the MSCI ACWI Index (North America is approximately 60% of the ACWI). The next chart demonstrates the performance of mega-cap growth stocks vs the S&P 500 ex mega-cap growth YTD.

The unbelievable performance of the mega caps has driven the global equity market. It is important to note that the mega-cap growth stocks in the above chart account for only eleven stocks and the other line constitutes the remaining 489 stocks of the S&P500. What can be seen in the chart is that the composite without the mega caps is still well below where it started in the beginning of the year. Effectively the broader market outside of the mega caps have lagged significantly and speak to the concentrated nature of the recovery in the second quarter.

The various themes discussed above are shown below in the return table for this year and the cumulative excess return chart against the broader market index (MSCI ACWI):

23

Visually you can see the order of divergence driven first by sector performance followed by the value / growth style performance, then the size premium and lastly the regional effect.

The performance of the fund has certainly been affected by these large divergences. Underperformance in the fund is the result of the following:

• A moderate underweight to tech (as a look through from portfolio holdings of underlying managers) • A relatively large underweight to the mega-caps (even though we hold a cheap index tracker for North

America – which means we own the big tech stocks; just not enough); and • Regionally favouring markets outside of the US on a relative basis even though our exposure to North

America is a little under 50%.

The managers we invest with are focusing on companies likely to survive the current recession and its aftermath. There are broadly two types of such companies. Those called ‘quality’ companies, whose revenues are not expected to fall much if at all (tech companies would be an example of this). The problem with these sorts of companies is that they have already done very well and are hence expensive. Historically, as markets have begun to recover these sorts of companies have continued to do well, but their shares have sometimes fallen as investors seek out bargains.

This leads us to the second type of survivor – the type our managers are focusing on, the bargains. These are companies that have been heavily hit by the crisis, and so are cheap, but have the financial reserves and flexibility to be able to survive and take advantage of competitors who are in a weaker position. This focus has not helped the fund recently as the market has favoured only a very narrow subset of stocks which are concentrated in a

Cumulative Excess Return versus MSCI ACWI from 2019/12/31 to 2020/06/30

-25%

-20%

-15%

-10%

-5%

0%

5%

10%

15%

20%

25%

31/12/2019 31/01/2020 29/02/2020 31/03/2020 30/04/2020 31/05/2020 30/06/2020

MSCI ACWI

MSCI ACWI Growth

MSCI ACWI Value

MSCI ACWI Small Cap

S&P500

MSCI Europe

S&P 500 Information Technology (Sector)

S&P 500 Financials (Sector)

24

particular theme and industry. We are of the opinion that patience is required to let the large divergences mentioned above play out and level the playing field.

We maintain diversification (across asset classes, investment styles, currencies, countries and fund managers) to help with the risks, but given the opportunities we see in portfolios we think they are well positioned for the future.

GLOBAL BONDS


Note: The performance and commentary presented for this feeder fund are subject to the disclaimers provided at the end of this document. Please refer to the Stanlib Global Bond Feeder Fund Minimum Disclosure Document for full performance history (this is also made available at the end of this document).


0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

35.00%

Bloomberg Barclays Global Aggregate PMX Global Bond Comp iShares Global Govt Bond UCITS ETF iShares Global Corp Bond UCITS ETF


90

100

110

120

130

140

150

28/06/19 28/07/19 28/08/19 28/09/19 28/10/19 28/11/19 28/12/19 28/01/20 28/02/20 28/03/20 28/04/20 28/05/20 28/06/20

Bloomberg Barclays Global Aggregate and Fund Performance

Bloomberg Barclays Global Aggregate PMX Global Bond Comp

iShares Global Govt Bond UCITS ETF iShares Global Corp Bond UCITS ETF

25


Note: Performance figures in ZAR are given for the A class of the Stanlib Global Bond Feeder fund which is more expensive than the fund the PMX solutions is invested in (B2 class).


1. On 17 March 2020 we launched the PortfolioMetrix BCI Global Bond FoF. 2. A revisit of the rationale behind the fund launch can be found here: C:\Dropbox (PMX)\PMXSA Adviser

Documents\1. Monthly Performance Reports\1. Communication\Portfolio Updates\2020\20200302 PMX BCI Global Bond FoF Launch.pdf


Summary

• The PortfolioMetrix BCI Global Bond FoF outperformed the Bloomberg Barclays Global Aggregate Bond Index over the quarter by 3.4% in rands.

• The building block underperformed over the year by 9.8% as it generated a return of 18.6% and the index returned 28.4%.

Detail

The PortfolioMetrix fund was launched mid-March 2020. Over the quarter the fund slowly transitioned out of the Stanlib Global Bond fund into the following split:

• iShares Global Government Bond ETF: 55% • iShares Global Corporate Bond ETF: 45%

The last trade out of the Stanlib fund was on 10 June 2020 and therefore a large part of the fund’s performance over the quarter was still driven by the Stanlib fund.

We now have a fund that is far cheaper and provides the exposure we want from the asset class. The asset class was introduced into South African portfolios in 2018 as a highly effective “shock absorber” to portfolios. Through quantitative research, it was established that holding unhedged exposure to hard currency developed market bonds yielded strong diversification benefits with only small allocations in portfolios. The result is that unhedged global bonds exposure peaks at +/- 4.5% across the risk curve. For maximum effect we require holdings of hard currency bonds of developed markets with long duration. The best way to achieve this is through the passive implementation that we have created.

GLOBAL PROPERTY


Note: The performance and commentary presented for this FoF are subject to the disclaimers provided at the end of this document. Please refer to the PortfolioMetrix BCI Global Property FoF’s Minimum Disclosure Document for full performance history. This is also made available at the end of this document.

26




None


PortfolioMetrix BCI Global Property FoF

Summary

• The index returned 7.51% in rand terms over the quarter, and a slightly less impressive 5.03% over the last 12 months

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%

14.00%

16.00%

18.00%

FTSE EPRA Nareit Developed Rental BCI Portfoliometrix BCI Global PropertyFund of Funds

Catalyst Global Real Estate PrescientFeeder

BCI Sesfikile BCI Global Property


75

85

95

105

115

125

135

28/06/19 28/07/19 28/08/19 28/09/19 28/10/19 28/11/19 28/12/19 28/01/20 28/02/20 28/03/20 28/04/20 28/05/20 28/06/20

FTSE EPRA/NAREIT Developed Rental and Fund Performance

FTSE EPRA Nareit Developed Rental BCI Portfoliometrix BCI Global Property Fund of Funds

BCI Sesfikile BCI Global Property Catalyst Global Real Estate Prescient Feeder

27

• PortfolioMetrix BCI Global Property FoF performed well; o Marginally beating the index by 0.09% over the quarter o Navigating the difficult past 12 months with alpha of 8.92%

• Developed Rental has beaten the non-Rental index over the past year by 6.16% in USD terms • Regionally during Quarter 2 (total USD return);

o Australia rebounded strongly after a larger Q1 selloff to deliver 35.84% for the 3-months, o Japan was the worst performing region with 4.89%

• Sector favourites included e-commerce and last-mile logistics facing businesses, data centres, and defensive housing sectors such as Multifamily, manufactured, and single family homes

• Global Property is offering value over global bonds (corporates and government bonds) in a very low yield environment.

Detail

The past quarter saw a rebound from the previous one, but certainly by a more discerning market. In the first quarter most sectors and regions sold off heavily, the second quarter demonstrated a perceived “new economy” where hotels and retail were neglected in favour of more liquid and defensive counters such as those operating in residential, last mile logistics, and e-commerce. None of these prior trends are new, but the pandemic this year has accelerated them, by some estimates the fast-tracked progress is in the region of 3 years in a mere 3-month period.

The asset class is not without risks but it appears that the initial shock and uncertainty earlier this year may subside to some degree. In an environment where the broader capital market is providing little to no yield, Global Property currently has a spread of more than 350bps over global bonds, this is also higher than the long-term average spread of 240bps:

Source: Sesfikile Capital

The sell-off in March also provided some buying opportunities of quality companies that had previously traded at or above fair value. Looking at sectoral performance for the first half of 2020 paints a clear picture of some of the opportunities:

28

Source: Catalyst

Although both our underlying managers made some changes to their portfolios (to reflect the new economic landscape), many of the changes remained within their earlier investment cases, perhaps a testament to this is their longer-term performance. Over the quarter they produced the following relative returns (vs the FTSE E/N Developed Rental Index, ZAR):

• Catalyst Global Real Estate: Underperformed by 1.45% • Sesfikile Global Property: Outperformed by 1.50%

One of the major threats to valuations lies in balance sheet strength (specifically debt covenants) and revenues. It is thus worth reflecting on both of these with some hard data. Research performed by UBS and Sesfikile indicates that gearing levels (and threats to covenant breaches) remains low, this case is further reinforced by exceptionally low global rates (both government and corporate). The low gearing levels are in contrast to the high metrics seen during the 2008 Financial Crisis.

Source: Sesfikile Capital, UBS

Rental collections across the globe faced various positive and negative factors, but in most cases the collections were better than expected. In some instances, governments served as guarantor, and in others policy response quelled the impact of a drawn-out economic lock-down. The following image shows collection rates over the period of April and May:

29

Source: Sesfikile Capital

Alongside low rental collections for Hotels and Malls, Office is facing an uncertain future. There is no doubt that demand will be lower, but that is not to say that demand will recede completely as a dedicated work space benefits many, it is likely that the office spaces located close to major transport hubs and infrastructure will be most in demand. The doubt over these large-space tenants also means that developers face a more uncertain future; just what will the demand be? That is to some extent reflected in the performance numbers between developers and rental-focussed companies (a developer also faces the challenge of projects already in-progress).

30

DISCLAIMERS

Shortform

This document is only for professional financial advisers, their clients and their prospective clients. The information given here is for information purposes only and is not intended to constitute financial, legal, tax, investment or other professional advice. It should not be relied upon as such and PortfolioMetrix cannot accept any liability for loss for doing so. Any forecasts, expected future returns or expected future volatilities are not guaranteed and should not be relied upon. The value of investments, and the income from them, can go down as well as up, and you may not recover the amount of your original investment. Past performance is not a reliable indicator of future performance. Portfolio holdings and asset allocation can change at any time without notice. PortfolioMetrix Asset Management SA (Pty) Ltd is an Authorised Financial Services Provider in South Africa.

Longform

Boutique Collective Investments (RF) (Pty) Ltd (“BCI”) and PortfolioMetrix Asset Management SA (Pty) Ltd (“PMX”) are the registered Manager of the following Collective Investments Schemes.

• PortfolioMetrix BCI Equity FoF • PortfolioMetrix BCI Global Equity FoF • PortfolioMetrix BCI Bond FoF • PortfolioMetrix BCI Income FoF • PortfolioMetrix BCI SA Property Fund • PortfolioMetrix BCI Global Property FoF

BCI & PMX are approved in terms of the Collective Investments Schemes Control Act, No 45 of 2002 and is a full member of the Association for Savings and Investment SA.

Collective Investment Schemes in securities are generally medium to long term investments. The value of participatory interests may go up or down and past performance is not necessarily an indication of future performance. The Manager does not guarantee the capital or the return of a portfolio. Collective Investments are traded at ruling prices and can engage in borrowing and scrip lending. A schedule of fees, charges and maximum commissions is available on request. PMX reserves the right to close the portfolio to new investors and reopen certain portfolios from time to time in order to manage them more efficiently. Additional information, including application forms, annual or quarterly reports can be obtained from BCI & PMX, free of charge. Performance fees will be calculated and accrued on a daily basis based upon the daily outperformance, in excess of the benchmark, multiplied by the share rate and paid over to the manager monthly.

Performance figures quoted for collective investment schemes or indexes is sourced from Financial Express Ltd, Bloomberg and/or Morningstar, as at the date of this document for a lump sum investment, using NAV-NAV with income reinvested and do not take any upfront manager’s charge into account. Income distributions are declared on the ex-dividend date. Actual investment performance will differ based on the initial fees charge applicable, the actual investment date, the date of reinvestment and dividend withholding tax.

Investments in foreign securities may include additional risks such as potential constraints on liquidity and repatriation of funds, macroeconomic risk, political risk, foreign exchange risk, tax risk, settlement risk as well as potential limitations on the availability of market information.

Boutique Collective Investments (RF) Pty Ltd retains full legal responsibility for the third party named portfolio.

Although reasonable steps have been taken to ensure the validity and accuracy of the information in this document, BCI and PMX does not accept any responsibility for any claim, damages, loss or expense, however it arises, out of or in connection with the information in this document, whether by a client, investor or intermediary. This document should not be seen as an offer to purchase any specific product and is not to be construed as advice or guidance in any form whatsoever. Investors are encouraged to obtain independent professional investment and taxation advice before investing with or in any of BCI/PMX products.

A fund of funds is a portfolio that invests in portfolios of collective investment schemes that levy their own charges, which could result in a higher fee structure.

A feeder fund is a portfolio that invests in a single portfolio of collective investment schemes, which levies its own charges and which could result in a higher fee structure for the feeder fund.

MINIMUM DISCLOSURE DOCUMENTS

PORTFOLIOMETRIX BCI EQUITY

MANAGED BY: PORTFOLIOMETRIX - AUTHORISED FSP 42383

MINIMUM DISCLOSURE DOCUMENT

30 JUNE 2020

INVESTMENT OBJECTIVE

The portfolio objective is to secure high long-term capital growth.

INVESTMENT POLICY

The PortfolioMetrix BCI Equity Fund of Funds is a domestic general equity portfolio.The portfolio's objective is to secure high long-term capital growth. Investments to beincluded in the portfolio will, apart from assets in liquid form, consist solely ofparticipatory interests and other forms of participation of collective investmentschemes, or other similar schemes operated in territories with a regulatoryenvironment which is to the satisfaction of the manager and trustee of a sufficientstandard to provide investor protection at least equivalent to that in South Africa.

PERFORMANCE (Net of Fees)

-20%

-10%

0%

10%

20%

30%

% C

umul

ativ

e Re

turn

06-2016 06-2017 06-2018 06-2019 06-2020

Date

PortfolioMetrix BCI Equity Fund of Funds (B1) Fund Benchmark

Cumulative (%) 1 Year 3 Years 5 Years 10 Years Since Inception

Fund -3.47 11.25 10.19 - 23.11

Fund Benchmark -6.09 6.14 10.83 - 20.49

Annualised (%)Fund -3.47 3.62 1.96 - 3.55

Fund Benchmark -6.09 2.00 2.08 - 3.18

Inception date: 18 Jul 2014Annualised return is the weighted average compound growth rate over the period measured.

Risk Statistics

Fund 1 Year 3 Years

Standard deviation 30.49% 19.68%

Maximum drawdown -27.33% -27.33%

Highest and Lowest

Calendar year performance since inception

High 15.70%

Low -7.37%

MONTHLY RETURNS

JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC YTD

2020 -1.5 -8.7 -19.2 17.7 0.4 6.3 - - - - - - -8.75

2019 3.4 3.1 0.6 3.7 -5.8 4.0 -2.0 -2.1 1.4 4.1 -0.7 5.2 15.31

2018 0.5 -1.1 -4.4 3.9 -3.7 1.4 1.0 2.8 -3.5 -5.2 -1.4 2.8 -7.37

2017 3.9 -2.1 1.4 3.0 -0.4 -4.1 5.8 2.5 -1.1 6.4 2.2 -2.0 15.70

2016 -4.0 -0.9 6.7 0.2 2.9 -2.8 0.4 -0.1 -0.6 -3.8 -0.6 0.8 -2.21

2015 2.9 4.8 0.9 4.1 -2.4 -1.0 0.7 -2.5 -0.7 6.9 -1.6 -2.4 9.39

FUND INFORMATION

Portfolio Manager: Brandon Zietsman, Russell BrownLaunch date: 18 Jul 2014Portfolio Value: R 5 687 597 499NAV Price (Fund Inception): 100 centsNAV Price as at month end: 109.23 centsJSE Code: PBCEISIN Number: ZAE000190765ASISA Category: SA - Equity - GeneralFund Benchmark: FTSE/JSE SWIX J403T IndexMinimum Investment Amount: None#Monthly Fixed Admin Fee: R15 excl. VAT on all direct

investor accounts with balancesof less than R100 000

Valuation: DailyValuation time: 08:00 (T+1)Transaction time: 14:00Regulation 28: NoDate of Income Declaration: 30 June/31 DecemberDate of Income Payment: 2nd working day of Jul/Jan

Income Distribution (cpu)

Jul-19

-

Aug-19

2.23

Sep-19

-

Oct-19

-

Nov-19

-

Dec-19

-

Jan-20

-

Feb-20

1.15

Mar-20

-

Apr-20

-

May-20

-

Jun-20

1.89

FEE STRUCTURE

Annual Service Fee: (B1) 0.09% - (B2) 0.49% (Incl.VAT)

Initial Advisory Fee (Max): 0.00% (Incl. VAT)Annual Advice Fee: 0 - 1.15% (if applicable)Initial Fee: 0.00% (Incl. VAT)Performance Fee: None* Total Expense Ratio (TER): Mar 20 : 0.84% (PY: 0.87%)Performance fees incl in TER: Mar 20 : 0.00% (PY: 0.00%)Portfolio Transaction Cost: Mar 20 : 0.36% (PY: 0.47%)Total Investment Charge: Mar 20 : 1.20% (PY: 1.34%)

All percentages include VAT

RISK PROFILE

High Risk• This portfolio has a higher exposure to equities than any other risk

profiled portfolio and therefore tends to carry higher volatility due tohigh exposure to equity markets.

• Expected potential long term returns are high, but the risk of potentialcapital losses is high as well, especially over shorter periods.

• Where the asset allocation contained in this MDD reflects offshoreexposure, the portfolio is exposed to currency risks.

• Therefore, it is suitable for long term investment horizons.

PORTFOLIOMETRIX BCI EQUITY FUND OF FUNDS (B1) | 1 of 2DATE OF ISSUE: 15 JULY 2020

FUND OF FUNDS (B1)

PORTFOLIOMETRIX BCI EQUITYFUND OF FUNDSMINIMUM DISCLOSURE DOCUMENT | 30 JUNE 2020

INFORMATION AND DISCLOSURES

RisksCertain investments - including those involving futures, options, equity swaps, and other derivatives may give rise to substantial risk and might not be suitable for all investors. Whereforeign securities are included in the portfolio there may be additional risks such as potential constraints on liquidity and repatriation of funds, macroeconomic risk, political risk, foreignexchange risk, tax risk, settlement risk as well as potential limitations on the availability of market information.

* Total Expense Ratio (TER)Please note: A higher TER ratio does not necessarily imply a poor return, nor does a low TER imply a good return. The current TER cannot be regarded as an indication of future TER’s. TransactionCosts are a necessary cost in administering the Fund and impacts Fund returns. It should not be considered in isolation as returns may be impacted by many other factors over time including marketreturns, the type of Fund, the investment decisions of the investment manager and the TER. The prior year (“PY”) TER and Transaction cost calculations are based upon the portfolio’s direct costs forthe financial year ended 31 August 2019, whilst the underlying portfolios’ ratio and cost calculations are based upon their most recent published figures, being 31 March 2020.

Effective Annual Cost:Boutique Collective Investments adopted the ASISA Standard on Effective Annual Cost ("EAC"). The EAC measure allows you to compare charges on your investments as well as theirimpact on your investment returns prior to investing. For further information regarding the ASISA Standard on Effective Annual Cost and access to the EAC calculator please visit ourwebsite at www.bcis.co.za. #Monthly Fixed Admin Fee: R15 excl. VAT which will apply to all direct investor accounts with balances of less than R100 000 at month end, unless an investor transacts online, in which case no such fee will be levied.

Total Investment Charges* Total Expense Ratio (TER) Transactional Cost (TC) Total Investment Charge (TER & TC)0.84% 0.36% 1.20%

Of the value of the Fund was incurred as expenses relatingto the administration of the Fund.

Of the value of the Fund was incurred as costs relating tothe buying and selling of the assets underlying the Fund.

Of the value of the Fund was incurred as costs relating tothe investment of the Fund.

FAIS Conflict of Interest DisclosurePlease note that your financial advisor may be a related party to the co-naming partner and/or BCI. It is your financial advisor’s responsibility to disclose all fees he/she receives fromany related party. The portfolio’s TER includes all fees paid by portfolio to BCI, the trustees, the auditors, banks, the co-naming partner, underlying portfolios, and any other investmentconsultants/managers as well as distribution fees and LISP rebates, if applicable. The portfolio’s performance numbers are calculated net of the TER expenses. The investment managerearns a portion of the service charge and performance fees where applicable. In some instances portfolios invest in other portfolios which form part of the BCI Scheme. Theseinvestments will be detailed in this document, as applicable.

Investment ManagerPortfoliometrix Asset Management SA (Pty) Ltd is an authorised Financial Service Provider FSP 42383.

Additional information, including application forms, annual or quarterly reports can be obtained from BCI, free of charge or can be accessed on our websitewww.bcis.co.za.Valuation takes place daily and prices can be viewed on our website (www.bcis.co.za) or in the daily newspaper.Actual annual performance figures are available to existing investors on request.Upon request the Manager will provide the investor with portfolio quarterly investment holdings reports.

Management Company Information Boutique Collective Investments (RF) (Pty) LimitedCatnia Building, Bella Rosa Village, Bella Rosa Street, Bellville, 7530 Tel: +27 (0)21 007 1500/1/2 +27 (0)21 914 1880 + Fax: 086 502 5319 + Email: [email protected] + www.bcis.co.za

Custodian / Trustee Information The Standard Bank of South Africa LimitedTel: 021 441 4100

DISCLAIMER

Boutique Collective Investments (RF) (Pty) Ltd (“BCI”) is a registered Manager of the Boutique Collective Investments Scheme, approved in terms of the Collective Investments SchemesControl Act, No 45 of 2002 and is a full member of ASISA. Collective Investment Schemes in securities are generally medium to long term investments. The value of participatoryinterests may go up or down and past performance is not necessarily an indication of future performance. BCI does not guarantee the capital or the return of a portfolio. CollectiveInvestments are traded at ruling prices and can engage in borrowing and scrip lending. A schedule of fees, charges and maximum commissions is available on request. BCI reserves theright to close the portfolio to new investors and reopen certain portfolios from time to time in order to manage them more efficiently. Additional information, including applicationforms, annual or quarterly reports can be obtained from BCI, free of charge. Performance figures quoted for the portfolio are from Morningstar, as at the date of this minimumdisclosure document for a lump sum investment, using NAV-NAV with income reinvested and do not take any upfront manager’s charge into account. Income distributions are declaredon the ex-dividend date. Actual investment performance will differ based on the initial fees charge applicable, the actual investment date, the date of reinvestment and dividendwithholding tax.BCI retains full legal responsibility for the third party named portfolio. Although reasonable steps have been taken to ensure the validity and accuracy of the informationin this document, BCI does not accept any responsibility for any claim, damages, loss or expense, however it arises, out of or in connection with the information in this document,whether by a client, investor or intermediary. This document should not be seen as an offer to purchase any specific product and is not to be construed as advice or guidance in anyform whatsoever. Investors are encouraged to obtain independent professional investment and taxation advice before investing with or in any of BCI's products. A fund of funds is aportfolio that invests in portfolios of collective investment schemes that levy their own charges, which could result in a higher fee structure.

PORTFOLIOMETRIX BCI EQUITY FUND OF FUNDS (B1) | 2 of 2+ e: [email protected] + t: (0)11 568 3400 + www.portfoliometrix.co.za + Corner Main Office Park, 2 Payne Road, Bryanston, South Africa

PORTFOLIO HOLDINGSAsset Allocation (%) As at 31 May 2020

0.01

0.05

3.11

4.25

91.92

Other

Offshore Cash

Domestic Bonds

Domestic Property

Domestic Cash

Domestic Equity

Top Holdings (%) As at 31 May 2020

Ninety One SA Equity 19.8Coronation Top 20 19.1Laurium Equity Prescient 18.9Fairtree Equity Prescient 18.8Satrix Mid Cap Index 12.836ONE BCI SA Equity 9.2

0 40 80 120 160

0.66

PORTFOLIOMETRIX BCI BOND



30 JUNE 2020


The Portfoliometrix BCI Bond Fund of Funds offers the potential for capital growth,together with a regular and high level of income.

INVESTMENT POLICY

Investments to be included in the portfolio may, apart from assets in liquid form,consists of participatory interests and other forms of participation of local and globalcollective investment schemes, or other similar schemes operated in territories with aregulatory environment which is to the satisfaction of the manager and trustee of asufficient standard to provide investor protection at least equivalent to that in SouthAfrica and which is consistent with the portfolio’s primary objective, investing in liquidform, debentures, bonds, fixed deposits, money market instruments and otherinterest-bearing securities. The underlying portfolios may invest in short, intermediateand long-dated securities and the portfolio’s underlying exposure will bepredominately bond investments.


-5%

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Date

PortfolioMetrix BCI Bond Fund of Funds (B1) Fund Benchmark


Fund 4.49 27.79 - - 26.80

Fund Benchmark 2.85 26.36 - - 24.81

Annualised (%)Fund 4.49 8.52 - - 8.21

Fund Benchmark 2.85 8.11 - - 7.64

Inception date: 27 Jun 2017Annualised return is the weighted average compound growth rate over the period measured.

Risk Statistics

Fund 1 Year 3 Years



Highest and Lowest


High 9.62%

Low 8.37%

MONTHLY RETURNS


2020 1.0 0.2 -8.5 3.8 7.0 -1.4 - - - - - - 1.44

2019 2.6 -0.1 0.8 0.8 0.6 1.6 -0.4 1.0 0.6 -0.2 0.3 1.6 9.62

2018 1.7 3.3 1.8 -0.2 -1.5 -0.7 2.0 -1.8 0.7 -1.3 3.8 0.6 8.37

2017 - - - - - - 1.2 1.1 1.2 -1.1 -0.5 4.2 6.04

FUND INFORMATION

Portfolio Manager: Brandon ZietsmanLaunch date: 27 Jun 2017Portfolio Value: R 2 234 444 488NAV Price (Fund Inception): 103.27 centsNAV Price as at month end: 104.75 centsJSE Code: PMFB1ISIN Number: ZAE000246039ASISA Category: SA Interest Bearing Variable TermFund Benchmark: JSE/ASSA All Bond index (ALBI)Minimum Investment Amount: None#Monthly Fixed Admin Fee: R15 excl. VAT on all direct




Jul-19

-

Aug-19

4.51

Sep-19

-

Oct-19

-

Nov-19

-

Dec-19

-

Jan-20

-

Feb-20

4.58

Mar-20

-

Apr-20

-

May-20

-

Jun-20

3.08

FEE STRUCTURE

Annual Service Fee: (A) 0.49% - (B1) 0.09% (Incl. VAT)Initial Advisory Fee (Max): 0.00% (Incl. VAT)Annual Advice Fee: 0 - 1.15% (if applicable)Initial Fee: 0.00% (Incl. VAT)Performance Fee: None* Total Expense Ratio (TER): Mar 20 : 0.54% (PY: 0.54%)Performance fees incl in TER: Mar 20 : 0.00% (PY: 0.00%)Portfolio Transaction Cost: Mar 20 : 0.00% (PY: 0.00%)Total Investment Charge: Mar 20 : 0.54% (PY: 0.54%)


RISK PROFILE

Low Risk• This portfolio has less than 10% equity exposure, if any, resulting in low

risk, stable investment returns.• The portfolio is not directly exposed to currency risk, but it is exposed to

default and interest rate risks.• The portfolio is suitable for shorter term investment horizons.

PORTFOLIOMETRIX BCI BOND FUND OF FUNDS (B1) | 1 of 2DATE OF ISSUE: 15 JULY 2020

FUND OF FUNDS (B1)

PORTFOLIOMETRIX BCI BONDFUND OF FUNDSMINIMUM DISCLOSURE DOCUMENT | 30 JUNE 2020


2.76

87.39

0 40 80 120

Offshore Bonds

Domestic Cash

Domestic Bonds















DISCLAIMER

Boutique Collective Investments (RF) (Pty) Ltd (“BCI”) is a registered Manager of the Boutique Collective Investments Scheme, approved in terms of the Collective Investments SchemesControl Act, No 45 of 2002 and is a full member of ASISA. Collective Investment Schemes in securities are generally medium to long term investments. The value of participatoryinterests may go up or down and past performance is not necessarily an indication of future performance. BCI does not guarantee the capital or the return of a portfolio. CollectiveInvestments are traded at ruling prices and can engage in borrowing and scrip lending. A schedule of fees, charges and maximum commissions is available on request. BCI reserves theright to close the portfolio to new investors and reopen certain portfolios from time to time in order to manage them more efficiently. Additional information, including applicationforms, annual or quarterly reports can be obtained from BCI, free of charge. Performance figures quoted for the portfolio are from Morningstar, as at the date of this minimumdisclosure document for a lump sum investment, using NAV-NAV with income reinvested and do not take any upfront manager’s charge into account. Income distributions are declaredon the ex-dividend date. Actual investment performance will differ based on the initial fees charge applicable, the actual investment date, the date of reinvestment and dividendwithholding tax.BCI retains full legal responsibility for the third party named portfolio. Although reasonable steps have been taken to ensure the validity and accuracy of the informationin this document, BCI does not accept any responsibility for any claim, damages, loss or expense, however it arises, out of or in connection with the information in this document,whether by a client, investor or intermediary. This document should not be seen as an offer to purchase any specific product and is not to be construed as advice or guidance in anyform whatsoever. Investors are encouraged to obtain independent professional investment and taxation advice before investing with or in any of BCI's products. A fund of funds is aportfolio that invests in portfolios of collective investment schemes that levy their own charges, which could result in a higher fee structure. Income funds derive their income frominterest-bearing instruments in accordance with Section 100(2) of the Act. The yield is a current yield and is calculated daily.

PORTFOLIOMETRIX BCI BOND FUND OF FUNDS (B1) | 2 of 2+ e: [email protected] + t: (0)11 568 3400 + www.portfoliometrix.co.za + Corner Main Office Park, 2 Payne Road, Bryanston, South Africa

9.85

STANLIB Bond 54.1Coronation Bond 37.7

PORTFOLIOMETRIX BCI INCOME



30 JUNE 2020


The Portfoliometrix BCI Income Fund of Funds is a specialist income generatingportfolio. The investment objective of the portfolio is to achieve a high level ofsustainable income and stability of capital invested.

INVESTMENT POLICY

Investments to be included in the portfolio will, apart from assets in liquid form,consists of participatory interests and other forms of participation of local and globalcollective investment schemes, or other similar schemes operated in territories with aregulatory environment which is to the satisfaction of the manager and trustee of asufficient standard to provide investor protection at least equivalent to that in SouthAfrica and which is consistent with the portfolio’s primary objective, investing in liquidform, money market instruments, interest bearing instruments, bonds, debentures,corporate debt, equity securities, property securities, preference shares, convertibleequities and non-equity securities.


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PortfolioMetrix BCI Income Fund of Funds (B1) Fund Benchmark


Fund 5.15 25.57 - - 25.68

Fund Benchmark 7.93 26.84 - - 26.92

Annualised (%)Fund 5.15 7.89 - - 7.89

Fund Benchmark 7.93 8.25 - - 8.25


Risk Statistics

Fund 1 Year 3 Years



Highest and Lowest


High 9.33%

Low 9.27%

MONTHLY RETURNS


2020 0.7 0.2 -3.3 1.3 1.3 0.8 - - - - - - 0.94

2019 1.0 0.8 0.8 1.0 0.6 0.7 0.7 0.8 0.7 0.7 0.5 0.7 9.33

2018 0.7 0.6 1.1 0.9 0.4 0.8 0.7 0.9 0.7 0.8 0.4 0.9 9.27

2017 - - - - - - 0.8 0.6 0.8 0.9 0.3 0.6 4.13

FUND INFORMATION

Portfolio Manager: Brandon ZietsmanLaunch date: 27 Jun 2017Portfolio Value: R 1 690 831 564NAV Price (Fund Inception): 103.81 centsNAV Price as at month end: 106.56 centsJSE Code: PIFB1ISIN Number: ZAE000246054ASISA Category: SA Multi - Asset IncomeFund Benchmark: SteFI + 1% p.a.Minimum Investment Amount: None#Monthly Fixed Admin Fee: R15 excl. VAT on all direct


Valuation: DailyValuation time: 08:00 (T+1)Transaction time: 14:00Regulation 28: YesDate of Income Declaration: 31 Mar/30 Jun/30 Sep/31 DecDate of Income Payment: 2nd day of Apr/Jul/Oct/Jan


Jul-19

-

Aug-19

2.00

Sep-19

-

Oct-19

-

Nov-19

2.04

Dec-19

-

Jan-20

-

Feb-20

1.95

Mar-20

-

Apr-20

-

May-20

-

Jun-20

1.91

FEE STRUCTURE



RISK PROFILE

Low Risk• This portfolio has less than 10% equity exposure, if any, resulting in low

risk, stable investment returns.• The portfolio is not directly exposed to currency risk, but it is exposed to

default and interest rate risks.• The portfolio is suitable for shorter term investment horizons.

PORTFOLIOMETRIX BCI INCOME FUND OF FUNDS (B1) | 1 of 2DATE OF ISSUE: 15 JULY 2020

FUND OF FUNDS (B1)

PORTFOLIOMETRIX BCI INCOMEFUND OF FUNDSMINIMUM DISCLOSURE DOCUMENT | 30 JUNE 2020














DISCLAIMER

Boutique Collective Investments (RF) (Pty) Ltd (“BCI”) is a registered Manager of the Boutique Collective Investments Scheme, approved in terms of the Collective Investments SchemesControl Act, No 45 of 2002 and is a full member of ASISA. Collective Investment Schemes in securities are generally medium to long term investments. The value of participatoryinterests may go up or down and past performance is not necessarily an indication of future performance. BCI does not guarantee the capital or the return of a portfolio. CollectiveInvestments are traded at ruling prices and can engage in borrowing and scrip lending. A schedule of fees, charges and maximum commissions is available on request. BCI reserves theright to close the portfolio to new investors and reopen certain portfolios from time to time in order to manage them more efficiently. Additional information, including applicationforms, annual or quarterly reports can be obtained from BCI, free of charge. Performance figures quoted for the portfolio are from Morningstar, as at the date of this minimumdisclosure document for a lump sum investment, using NAV-NAV with income reinvested and do not take any upfront manager’s charge into account. Income distributions are declaredon the ex-dividend date. Actual investment performance will differ based on the initial fees charge applicable, the actual investment date, the date of reinvestment and dividendwithholding tax.BCI retains full legal responsibility for the third party named portfolio. Although reasonable steps have been taken to ensure the validity and accuracy of the informationin this document, BCI does not accept any responsibility for any claim, damages, loss or expense, however it arises, out of or in connection with the information in this document,whether by a client, investor or intermediary. This document should not be seen as an offer to purchase any specific product and is not to be construed as advice or guidance in anyform whatsoever. Investors are encouraged to obtain independent professional investment and taxation advice before investing with or in any of BCI's products. A fund of funds is aportfolio that invests in portfolios of collective investment schemes that levy their own charges, which could result in a higher fee structure. Income funds derive their income frominterest-bearing instruments in accordance with Section 100(2) of the Act. The yield is a current yield and is calculated daily.

PORTFOLIOMETRIX BCI INCOME FUND OF FUNDS (B1) | 2 of 2+ e: [email protected] + t: (0)11 568 3400 + www.portfoliometrix.co.za + Corner Main Office Park, 2 Payne Road, Bryanston, South Africa

PORTFOLIO HOLDINGS

0.150.150.330.420.891.326.37

37.3355.18

Offshore CashOffshore Equity

Offshore PropertyUnit Trusts

Domestic EquityAfrica Bond

Domestic PropertyOffshore BondsDomestic Cash

Domestic Bonds


Coronation Strategic Income 35.1

BCI Income Plus 16.6Matrix Novare Stable Income 15.0Investec Diversified Income 15.0

Nedgroup Inv Flexible Inc 16.8

Offshore Cash (include currency futures)

Effective Exposure (%) As at 31 May 2020

-2.14

-30 0 30 60 90 120

PORTFOLIOMETRIX BCI SA PROPERTY FUND (B1)MANAGED BY: PORTFOLIOMETRIX - AUTHORISED FSP 42383


30 JUNE 2020


The Portfoliometrix BCI SA Property Fund is a real estate portfolio with a primaryobjective to provide the investor with a high income and long term capitalappreciation found through investing in South African listed property securities.

INVESTMENT POLICY

The investable universe of the portfolio will be equity and property securities,property collective investment schemes, property loan stock, fixed interest securities,debentures, preference shares, non-equity securities and assets in liquid form. Theportfolio will invest at least 80% of the market value of the portfolio in shares listed inthe FTSE / JSE Real Estate industry group and may include other high yielding securitiesfrom time to time. Up to 10% of the portfolio may be invested in shares outside thedefined sectors in companies that conduct similar business activities as those in thedefined sectors. The portfolio may from time to time invest in listed and unlistedfinancial instruments. The manager may also include forward currency, interest rateand exchange rate swap transactions.


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PortfolioMetrix BCI SA Property Fund (B1) Fund Benchmark


Fund -29.71 -34.32 - - -34.46

Fund Benchmark -39.98 -45.52 - - -45.67

Annualised (%)Fund -29.71 -13.07 - - -13.10

Fund Benchmark -39.98 -18.33 - - -18.35


Risk Statistics

Fund 1 Year 3 Years



Highest and Lowest


High 2.87%

Low -22.93%

MONTHLY RETURNS


2020 -2.7 -12.7 -31.4 9.2 0.4 11.9 - - - - - - -28.55

2019 7.9 -4.3 -2.3 2.3 -0.3 1.7 -1.7 -2.6 1.4 3.4 -0.9 -1.0 2.87

2018 -10.4 -9.1 -1.5 7.0 -5.0 -3.2 -0.9 3.1 -0.8 0.1 -3.5 -0.3 -22.93

2017 - - - - - - 3.8 1.0 3.1 2.5 1.9 2.7 15.95

FUND INFORMATION

Portfolio Manager: Brandon ZietsmanLaunch date: 27 Jun 2017Portfolio Value: R 584 958 004NAV Price (Fund Inception): 107.27 centsNAV Price as at month end: 59.61 centsJSE Code: PBPB1ISIN Number: ZAE000246062ASISA Category: SA Real Estate GeneralFund Benchmark: FTSE/JSE SA Listed Property Total

Return Index (J253T)Minimum Investment Amount: None#Monthly Fixed Admin Fee: R15 excl. VAT on all direct


Valuation: DailyValuation time: 15:00Transaction time: 14:00Regulation 28: NoDate of Income Declaration: 31 Mar/30 Jun/30 Sep/31 DecDate of Income Payment: 2nd day of Apr/Jul/Oct/Jan


Jul-19

-

Aug-19

0.61

Sep-19

-

Oct-19

-

Nov-19

2.42

Dec-19

-

Jan-20

-

Feb-20

0.48

Mar-20

-

Apr-20

-

May-20

-

Jun-20

1.99

FEE STRUCTURE



RISK PROFILE

Medium Risk / Medium - High Risk (Property Funds)• This portfolio carries exposure to mainly property securities.• Property by nature is a moderate to high risk investment.• Where the asset allocation contained in this MDD reflects offshore

exposure, the portfolio is exposed to currency risks.• The portfolio is exposed to interest rate risks and is sensitive to inflation

and interest rate cycles.• The portfolio is suitable for medium to long term investment horizons.

PORTFOLIOMETRIX BCI SA PROPERTY FUND (B1) | 1 of 2DATE OF ISSUE: 15 JULY 2020

PORTFOLIOMETRIX BCI SA PROPERTY FUND (B1)MINIMUM DISCLOSURE DOCUMENT | 30 JUNE 2020


4.58

89.39

Domestic Bonds

Domestic Cash

Domestic Property


NEPI Rockcastle PLC 17.7Growthpoint Properties Ltd 13.7Resilient REIT Ltd 8.0Equites Property Fund Ltd 7.3

Redefine Properties Ltd 4.2

Vukile Property Fund Ltd 3.9Investec Australia Property Fund 3.7










Investment ManagerPortfoliometrix Asset Management SA (Pty) Ltd is an authorised Financial Service Provider FSP 42383. Appointed sub-investment manager: Sesfikile Capital (Pty)Ltd (FSP 39946) | ABSA Alternative Asset Management (Pty) Ltd (FSP 22877).




DISCLAIMER

Boutique Collective Investments (RF) (Pty) Ltd (“BCI”) is a registered Manager of the Boutique Collective Investments Scheme, approved in terms of the Collective Investments SchemesControl Act, No 45 of 2002 and is a full member of ASISA. Collective Investment Schemes in securities are generally medium to long term investments. The value of participatoryinterests may go up or down and past performance is not necessarily an indication of future performance. BCI does not guarantee the capital or the return of a portfolio. CollectiveInvestments are traded at ruling prices and can engage in borrowing and scrip lending. A schedule of fees, charges and maximum commissions is available on request. BCI reserves theright to close the portfolio to new investors and reopen certain portfolios from time to time in order to manage them more efficiently. Additional information, including applicationforms, annual or quarterly reports can be obtained from BCI, free of charge. Performance figures quoted for the portfolio are from Morningstar, as at the date of this minimumdisclosure document for a lump sum investment, using NAV-NAV with income reinvested and do not take any upfront manager’s charge into account. Income distributions are declaredon the ex-dividend date. Actual investment performance will differ based on the initial fees charge applicable, the actual investment date, the date of reinvestment and dividendwithholding tax.BCI retains full legal responsibility for the third party named portfolio. Although reasonable steps have been taken to ensure the validity and accuracy of the informationin this document, BCI does not accept any responsibility for any claim, damages, loss or expense, however it arises, out of or in connection with the information in this document,whether by a client, investor or intermediary. This document should not be seen as an offer to purchase any specific product and is not to be construed as advice or guidance in anyform whatsoever. Investors are encouraged to obtain independent professional investment and taxation advice before investing with or in any of BCI's products.

PORTFOLIOMETRIX BCI SA PROPERTY FUND (B1) | 2 of 2+ e: [email protected] + t: (0)11 568 3400 + www.portfoliometrix.co.za + Corner Main Office Park, 2 Payne Road, Bryanston, South Africa

0 40 80 120

6.03 STANLIB Bond 4.6Fortress REIT Ltd 4.5

Nedgroup Inv Corporate Money Market 4.0

PORTFOLIOMETRIX BCI GLOBAL EQUITY



30 JUNE 2020


The portfolio objective is to secure high long-term capital growth.

INVESTMENT POLICY

The PortfolioMetrix BCI Global Equity Fund of Funds is a rand denominated offshoreequity portfolio. The portfolio's objective is to secure high long-term capital growth.Investments to be included in the portfolio will, apart from assets in liquid form,consist solely of participatory interests and other forms of participation of globalcollective investment schemes, or other similar schemes operated in territories with aregulatory environment which is to the satisfaction of the manager and trustee of asufficient standard to provide investor protection at least equivalent to that in SouthAfrica.


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Date

PortfolioMetrix BCI Global Equity Fund of Funds (B1) Fund Benchmark


Fund 18.12 48.41 81.99 - 103.59

Fund Benchmark 25.82 58.55 95.72 - 118.11

Annualised (%)Fund 18.12 14.07 12.72 - 13.50

Fund Benchmark 25.82 16.61 14.37 - 14.91

Inception date: 19 Nov 2014Annualised return is the weighted average compound growth rate over the period measured.

Risk Statistics

Fund 1 Year 3 Years



Highest and Lowest


High 33.28%

Low -6.89%

MONTHLY RETURNS


2020 6.0 -5.0 -2.7 14.9 -0.9 0.8 - - - - - - 12.57

2019 -1.0 8.9 2.1 3.8 -3.8 2.5 1.3 2.5 1.7 1.8 -0.7 -1.7 18.32

2018 2.5 -5.0 -2.6 8.0 0.8 7.8 -2.4 13.4 -3.6 -4.0 -4.5 -2.6 5.88

2017 0.5 -0.2 4.6 1.9 1.3 -0.3 3.8 -2.1 6.1 7.8 -1.9 -7.8 13.61

2016 -6.1 1.3 -1.5 -1.3 9.5 -9.0 1.0 7.1 -6.2 -4.3 3.9 0.0 -6.89

2015 -1.2 5.8 2.5 2.6 1.3 -1.9 3.6 -1.3 -0.7 9.7 2.7 6.6 33.28

FUND INFORMATION

Portfolio Manager: Brandon Zietsman, Brendan deJongh

Launch date: 19 Nov 2014Portfolio Value: R 3 346 691 686NAV Price (Fund Inception): 100 centsNAV Price as at month end: 203.14 centsJSE Code: PBGEISIN Number: ZAE000190773ASISA Category: Global Equity GeneralFund Benchmark: MSCI All Country World IndexMinimum Investment Amount: None#Monthly Fixed Admin Fee: R15 excl. VAT on all direct




Jul-19

-

Aug-19

0.12

Sep-19

-

Oct-19

-

Nov-19

-

Dec-19

-

Jan-20

-

Feb-20

0.00

Mar-20

-

Apr-20

-

May-20

-

Jun-20

0.00

FEE STRUCTURE

Annual Service Fee: (B1) 0.09% - (B2) 0.49% (Incl.VAT)

Initial Advisory Fee (Max): 0.00% (Incl. VAT)Annual Advice Fee: 0 - 1.15% (if applicable)Initial Fee: 0.00% (Incl. VAT)Performance Fee: None* Total Expense Ratio (TER): Mar 20 : 0.93% (PY: 0.93%)Performance fees incl in TER: Mar 20 : 0.00% (PY: 0.00%)Portfolio Transaction Cost: Mar 20 : 0.00% (PY: 0.00%)Total Investment Charge: Mar 20 : 0.93% (PY: 0.93%)


RISK PROFILE

High Risk• This portfolio has a higher exposure to equities than any other risk

profiled portfolio and therefore tends to carry higher volatility due tohigh exposure to equity markets.

• Expected potential long term returns are high, but the risk of potentialcapital losses is high as well, especially over shorter periods.

• Where the asset allocation contained in this MDD reflects offshoreexposure, the portfolio is exposed to currency risks.

• Therefore, it is suitable for long term investment horizons.

PORTFOLIOMETRIX BCI GLOBAL EQUITY FUND OF FUNDS (B1) | 1 of 2DATE OF ISSUE: 15 JULY 2020

FUND OF FUNDS(B1)

PORTFOLIOMETRIX BCI GLOBAL EQUITYFUND OF FUNDSMINIMUM DISCLOSURE DOCUMENT | 30 JUNE 2020


0.020.040.102.053.064.63

90.00

OtherOffshore Bonds

Domestic PropertyAfrica Equity

Offshore CashOffshore Property

Domestic CashOffshore Equity















DISCLAIMER


PORTFOLIOMETRIX BCI GLOBAL EQUITY FUND OF FUNDS (B1) | 2 of 2+ e: [email protected] + t: (0)11 568 3400 + www.portfoliometrix.co.za + Corner Main Office Park, 2 Payne Road, Bryanston, South Africa

iShares North American Eq Idx (UK) Acc 13.8Merian North American Equity GBP Acc 12.1Brown Advisory US Mid-Cap Gr £ Acc 9.6Fidelity American Special Sits Acc 9.3Matthews Pacific Tiger Fund GBP Acc 8.9Liontrust Special Situations Inc 7.4Baillie Gifford Japanese Acc 5.7Man GLG Japan CoreAlpha Profl Acc 5.0LF Miton European Opportunities Acc 4.8Jupiter European Acc 4.8

0.10

0 40 80 120

PORTFOLIOMETRIX BCI GLOBAL PROPERTY



30 JUNE 2020


The PortfolioMetrix BCI Global Property Fund of Funds’ objective is to provideinvestors with income as well as long term capital growth by investing in globalproperty markets.

INVESTMENT POLICY

Investments to be included in the portfolio will, apart from assets in liquid form,consists of participatory interests and other forms of participation of local and globalcollective investment schemes, or other similar schemes operated in territories with aregulatory environment which is to the satisfaction of the manager and trustee of asufficient standard to provide investor protection at least equivalent to that in SouthAfrica and which is consistent with the portfolio’s primary objective, investing mainlyin property and real estate securities, interest-bearing securities as well as assets inliquid form.


-15%

0%

15%

30%

45%

60%

% C

umul

ativ

e Re

turn

06-2018 06-2019 06-2020

Date

PortfolioMetrix BCI Global Property Fund of Funds (B1) Fund Benchmark


Fund 14.47 40.24 - - 40.31

Fund Benchmark 5.03 30.58 - - 31.39

Annualised (%)Fund 14.47 11.93 - - 11.91

Fund Benchmark 5.03 9.30 - - 9.50


Risk Statistics

Fund 1 Year 3 Years



Highest and Lowest


High 21.01%

Low 8.84%

MONTHLY RETURNS


2020 9.3 -1.6 -8.0 9.7 -2.0 0.2 - - - - - - 6.65

2019 2.0 6.5 7.1 -2.4 2.7 -3.3 2.7 9.5 2.0 2.5 -3.4 -5.5 21.01

2018 -6.3 -5.5 3.7 6.1 2.9 10.9 -4.1 14.9 -6.3 2.6 -5.7 -1.9 8.84

2017 - - - - - - 2.1 -1.2 3.3 4.7 -0.9 -7.7 -0.16

FUND INFORMATION

Portfolio Manager: Brandon ZietsmanLaunch date: 27 Jun 2017Portfolio Value: R 683 216 862NAV Price (Fund Inception): 87.26 centsNAV Price as at month end: 119.93 centsJSE Code: PMGB1ISIN Number: ZAE000246047ASISA Category: Global Real Estate GeneralFund Benchmark: FTSE ESPRA/NAREIT Developed

Rental Index Net TRMinimum Investment Amount: None#Monthly Fixed Admin Fee: R15 excl. VAT on all direct




Jul-19

-

Aug-19

0.43

Sep-19

-

Oct-19

-

Nov-19

-

Dec-19

-

Jan-20

-

Feb-20

0.44

Mar-20

-

Apr-20

-

May-20

-

Jun-20

0.12

FEE STRUCTURE



RISK PROFILE

Medium Risk / Medium - High Risk (Property Funds)• This portfolio carries exposure to mainly property securities.• Property by nature is a moderate to high risk investment.• Where the asset allocation contained in this MDD reflects offshore

exposure, the portfolio is exposed to currency risks.• The portfolio is exposed to interest rate risks and is sensitive to inflation

and interest rate cycles.• The portfolio is suitable for medium to long term investment horizons.

PORTFOLIOMETRIX BCI GLOBAL PROPERTY FUND OF FUNDS (B1) | 1 of 2DATE OF ISSUE: 15 JULY 2020

FUND OF FUNDS (B1)

PORTFOLIOMETRIX BCI GLOBAL PROPERTYFUND OF FUNDSMINIMUM DISCLOSURE DOCUMENT | 30 JUNE 2020


0.36

2.52

6.55

7.44

83.13

Domestic Property

Offshore Equity

Offshore Cash

Domestic Cash

Offshore Property















DISCLAIMER


PORTFOLIOMETRIX BCI GLOBAL PROPERTY FUND OF FUNDS (B1) | 2 of 2+ e: [email protected] + t: (0)11 568 3400 + www.portfoliometrix.co.za + Corner Main Office Park, 2 Payne Road, Bryanston, South Africa

Catalyst Global Rel Est UCITS USD Acc 47.8Sesfikile BCI Global Property 45.2

0 30 60 90 120 150

PORTFOLIOMETRIX BCI GLOBAL BOND



30 JUNE 2020


The Portfoliometrix BCI Global Bond Fund of Funds offers the potential for capitalgrowth, together with income.

INVESTMENT POLICY

The portfolio’s offshore exposure exceeds 80% of its asset value. Investments to beincluded in the portfolio may, apart from assets in liquid form, consists of participatoryinterests and other forms of participation of local and global collective investmentschemes, investing in debentures, bonds, fixed deposits, money market instrumentsand other interest-bearing securities. The underlying portfolios may invest in short,intermediate and long-dated securities and the portfolio’s underlying exposure will bepredominately global bond investments.


Performance will be displayed 6 months after the launch date.


Fund - - - - -

Fund Benchmark - - - - -

Annualised (%)Fund - - - - -

Fund Benchmark - - - - -

Inception date: 17 Mar 2020Annualised return is the weighted average compound growth rate over the period measured. **Thefunds' name changed from Warwick BCI Enhanced Income to Cadiz BCI Enhanced Income Fund dueto invest manager name change effective June 2019.

Risk Statistics

Fund 1 Year 3 Years

Standard deviation - -

Maximum drawdown - -

Highest and Lowest


High -

Low -

FUND INFORMATION

Portfolio Manager: Brandon ZietsmanLaunch date: 17 Mar 2020Portfolio Value: R 631 914 422NAV Price (Fund Inception): 100 centsNAV Price as at month end: 110.71 centsJSE Code: PRTFBISIN Number: ZAE000280780ASISA Category: Global Interest-Bearing Variable

TermFund Benchmark: Barclays Global Aggregate Bond

Index (in ZAR)Minimum Investment Amount: None#Monthly Fixed Admin Fee: R15 excl. VAT on all direct




Jul-19

-

Aug-19

-

Sep-19

-

Oct-19

-

Nov-19

-

Dec-19

-

Jan-20

-

Feb-20

-

Mar-20

-

Apr-20

-

May-20

-

Jun-20

0.00

FEE STRUCTURE

Annual Service Fee: (B1) 0.09% - (A) 0.49% (Incl. VAT)Initial Advisory Fee (Max): 0.00% (Incl. VAT)Annual Advice Fee: 0 - 1.15% (if applicable)Initial Fee: 0.00% (Incl. VAT)Performance Fee: None* Total Expense Ratio (TER): Mar 20 : 0.97% (PY:N/A )Performance fees incl in TER: Mar 20 : 0.00% (PY:NaN%)Portfolio Transaction Cost: Mar 20 : 0.00% (PY:N/A )Total Investment Charge: Mar 20 : 0.97% (PY:N/A )


RISK PROFILE

Low - Medium Risk• This portfolio has relatively low equity exposure, resulting in relatively

low volatility compared to higher risk portfolios.• Where the asset allocation contained in this MDD reflects offshore

exposure, the portfolio is exposed to currency risks.• The portfolio is exposed to default and interest rate risks.• Therefore, it is suitable for medium term investment horizons.• The expected potential long term investment returns may be lower over

the medium to long term than higher risk portfolios.

PORTFOLIOMETRIX BCI GLOBAL BOND FUND OF FUNDS (B1) | 1 of 2DATE OF ISSUE: 15 JULY 2020

FUND OF FUNDS (B1)

PORTFOLIOMETRIX BCI GLOBAL BONDFUND OF FUNDSMINIMUM DISCLOSURE DOCUMENT | 30 JUNE 2020


0.41

5.33

17.23

77.03

0 40 80 120

Domestic Bonds

Domestic Cash

Offshore Cash

Offshore Bonds


iShares Global Govt Bond ETF USD Dist 31.9iShares Global Corp Bond ETF USD Dist 28.3



PROJECTED TOTAL EXPENSE RATIO (TER)Please note: A higher TER ratio does not necessarily imply a poor return, nor does a low TER imply a good return. The current TER cannot be regarded as an indication of future TER’s. TransactionCosts are a necessary cost in administering the Fund and impacts Fund returns. It should not be considered in isolation as returns may be impacted by many other factors over time including marketreturns, the type of Fund, the investment decisions of the investment manager and the TER. The prior year (“PY”) TER and Transaction cost calculations are based upon the portfolio’s direct costs forthe financial year ended 31 August 2019, whilst the underlying portfolios’ ratio and cost calculations are based upon their most recent published figures, being 31 March 2020.











DISCLAIMER

Boutique Collective Investments (RF) (Pty) Ltd (“BCI”) is a registered Manager of the Boutique Collective Investments Scheme, approved in terms of the Collective Investments SchemesControl Act, No 45 of 2002 and is a full member of ASISA. Collective Investment Schemes in securities are generally medium to long term investments. The value of participatoryinterests may go up or down and past performance is not necessarily an indication of future performance. BCI does not guarantee the capital or the return of a portfolio. CollectiveInvestments are traded at ruling prices and can engage in borrowing and scrip lending. A schedule of fees, charges and maximum commissions is available on request. BCI reserves theright to close the portfolio to new investors and reopen certain portfolios from time to time in order to manage them more efficiently. Additional information, including applicationforms, annual or quarterly reports can be obtained from BCI, free of charge. Performance figures quoted for the portfolio are from Morningstar, as at the date of this minimumdisclosure document for a lump sum investment, using NAV-NAV with income reinvested and do not take any upfront manager’s charge into account. Income distributions are declaredon the ex-dividend date. Actual investment performance will differ based on the initial fees charge applicable, the actual investment date, the date of reinvestment and dividendwithholding tax. BCI retains full legal responsibility for the third party named portfolio. Although reasonable steps have been taken to ensure the validity and accuracy of theinformation in this document, BCI does not accept any responsibility for any claim, damages, loss or expense, however it arises, out of or in connection with the information in thisdocument, whether by a client, investor or intermediary. This document should not be seen as an offer to purchase any specific product and is not to be construed as advice or guidancein any form whatsoever. Investors are encouraged to obtain independent professional investment and taxation advice before investing with or in any of BCI's products. A fund of funds isa portfolio that invests in portfolios of collective investment schemes that levy their own charges, which could result in a higher fee structure.

PORTFOLIOMETRIX BCI GLOBAL BOND FUND OF FUNDS (B1) | 2 of 2+ e: [email protected] + t: (0)11 568 3400 + www.portfoliometrix.co.za + Corner Main Office Park, 2 Payne Road, Bryanston, South Africa

SFL STANLIB Global Bond 18.2

QUARTERLY UNDERLYING FUND COMMENTARY · 6 Market Cap Performance Over the Year Source:...

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Transcript of QUARTERLY UNDERLYING FUND COMMENTARY · 6 Market Cap Performance Over the Year Source:...