Wealth Range – Model Portfolios - STANLIB Multi-Manager€¦ · 15%. This resulted in all...

Wealth Range – Model Portfolios

Snapshot review for the period ended June 2018

Agenda

➜ Cash-Income Solution (Cash+1%)

➜ Wealth Preserver Solution (CPI+3%)

➜ Wealth Enhancer Solution (CPI+5%)

➜ Wealth Accumulator Solution (CPI+7%)

Jennifer Henry, CFA, FRM

Head of Portfolio Management: Retail Clients

Renate Potgieter, CFA

Portfolio Manager

Wealth RangeR

etu

rn

Risk

Time to achieve return 1 – 2 years 3 – 5 years 6 – 10 years

Wealth Enhancer

Wealth Accumulator

Cash-Income

Wealth Preserver

4

Cash-Income SolutionPerformance Review

Managers

0,9%

2,4%

1,1%

41,0%

49,1%

5,6%

Equity

Property

Other

Bonds

Cash

Foreign

Asset allocation

Quarter 1 year 3 years p.a. 5 years p.a.

Cash Income (Cash+1%) 1,9% 8,3% 8,6% 7,9%

Stefi+1% 1,8% 7,6% 7,6% 7,0%

Data as at 30 June 2018. Source – Morningstar, STANLIB Multi-Manager

Performance Overview

The portfolio is comfortably ahead of its Cash+1%

benchmark over the past year, with the income orientated

Funds producing good performance. The Solution remains

comfortably ahead of the peer group over the quarter as well as

the year.

➜ Coronation Strategic Income lagged the benchmark

marginally over the quarter, yet outperformed the peers. It

remains the best performing Fund in the Solution over the

year. The higher bond exposure detracted as rates rose

over the quarter. In addition, the property exposure

detracted. The high foreign exposure countered this as the

rand weakened over the quarter by almost 16%.

➜ STANLIB Income has outperformed peers over the quarter

and both peers and the benchmark the year to June 2018.

Their defensive positioning was beneficial over the quarter

as bond yields rose. The higher yields were used as an

opportunity to increase duration.

➜ Prescient Income Provider’s exposure to short duration

bonds contributed to the Fund being the best performer in

the Solution for the quarter. In addition, the currency option

and emerging market hedge contributed to performance in

the risk-off environment.

➜ STANLIB Money Market has produced a sound 12-

month performance and is comfortably ahead of the

South African IB Money Market Peer Group Average. It

continues to be the defensive Fund in the Solution,

taking much lower risk, yet has performed inline with our

Cash +1% benchmark.

Positioning and outlook

➜ The Solution remains appropriately diversified across

the managers in the portfolio, with the manager line up

remaining unchanged.

➜ Overall, underlying managers remain cautious, albeit

with marginally less cash than last quarter, at 49%. The

Solution still has over 90% in income oriented assets.

.

Cash-Income SolutionPerformance Summary

6

Managers

25,2%

7,1%

34,1%

0,3%

7,7%

25,8%

Equity

Property

Bonds

Other

Cash

Foreign

Asset allocation


Wealth Preserver (CPI+3%) 3,1% 6,9% 4,8% 6,7%

Inflation +3% 2,0% 7,4% 8,3% 8,4%

Wealth Preserver SolutionPerformance Review



The CPI+3% Solution is over 3.5% behind its inflation plus

benchmark over a three-year investment horizon. As much

as this is disappointing, it is inline with asset class returns,

with asset class returns struggling against CPI+3%. Over the

past 12 months, the Solution has performed in line with

peers. The quarter to June showed good performance,

outperforming both the inflation plus target as well as the

peer group.

➜ Coronation Capital Plus was the best performing

Fund in the Solution over the quarter. The Fund’s high

exposure to rand hedges contributed as the rand

weakened extensively over the quarter. In addition,

exposure to resource stocks contributed over the

quarter. The exposure to British American Tobacco

however continued to detract.

➜ Prudential Inflation Plus was the worst performing

Fund in the Solution over the quarter, and lagged peers

by 0.8%. The high allocation to inflation linked bonds

detracted. In addition, over 13% in property detracted

as the asset class continues to struggle.

➜ Investec Cautious Managed had a good quarter,

outperforming the peers by over 1% over the three

months. The Fund’s high allocation to foreign equity

contributed. Even though foreign equity was relatively

unchanged for the quarter, the rand weakened by over

15%. This resulted in all offshore exposure contributing

strongly. In addition, the low allocation to SA property

contributed given that property struggled over the

quarter.

➜ STANLIB Low Equity Tracker underperformed the

peers over the quarter and 12 months, being the worst

performer in the Solution. The high allocation to inflation

linked bonds detracted, as did the low exposure to

foreign. Having no local property contributed to relative

returns.


➜ The Solution’s equity (SA and foreign) exposure

increased over the quarter to over 40%. A large portion

of this (19%) comes from foreign equity, which may

provide some protection against rand weakness.

➜ The Solution remains well diversified across asset

classes, with over 40% in income assets and over 20%

in foreign.

Wealth Preserver SolutionPerformance Summary

8

Managers

34,3%

8,3%

26,5%

0,4%

3,9%

26,6%

Equity

Property

Bonds

Other

Cash

Foreign

Asset allocation


Wealth Enhancer (CPI+5%) 3,7% 7,3% 6,3% 8,6%

Inflation +5% 2,5% 9,4% 10,3% 10,4%

Wealth Enhancer SolutionPerformance Review



The CPI+5% Solution is ahead of the peers the quarter,

one-year and longer periods which is pleasing given the

tough environment over the past few years. Unfortunately,

given the drought of inflation beating returns, the Solution is

behind the inflation plus objective.

➜ Coronation Balanced Plus is the best performing

Fund in the Solution over the year, and has

outperformed peers by over 2% over the 12 months.

Stock selection contributed extensively. The good

performance was marginally offset by the property

exposure.

➜ Investec Opportunity was the best performing Fund in

the Solution over the quarter. This good performance

has resulted in the 12 month performance being ahead

of the peers as well. The Fund has the maximum

permissible exposure to Offshore, which contributed

over the quarter. In addition, rand-hedge and resource

counters contributed in the risk off environment.

➜ Prudential Inflation Plus had a disappointing

quarter, being the worst performing Fund in the

Solution. The high allocation to inflation linked bonds

as well as property both detracted, as did the

exposure to global fixed income.

➜ STANLIB High Equity Tracker performed well over

the quarter and year. This is pleasing given that we

expect the passive Fund to underperform it’s active

peers as volatility increases.


➜ We remain happy with this model portfolio’s overall

performance and the portfolio construction

framework.

➜ The Solution has over 55% exposure to equity,

which has increased from previous quarters. The

global exposure is important as the political risks

increase.

Wealth Enhancer SolutionPerformance Summary

10

Managers

Wealth Accumulator SolutionPerformance Review


Wealth Accumulator (CPI+7%) 5,1% 9,0% 5,8% 9,7%

Inflation +7% 3,0% 11,4% 12,3% 12,4%

44,3%

5,6%

17,1%

0,2%

5,6%

27,2%

Equity

Property

Bonds

Other

Cash

Foreign

Asset allocation



Given the drought of inflation beating returns, the CPI+7%

Solution continues to disappoint relative to the inflation plus

objective over 3 and 5 years. However, the Solution is ahead

of the ASISA SA High-Equity Peer Group Average over all

periods.

➜ Prudential Balanced was the best performer over the

year. The strong performance came from good stock

selection, with SA Equity exposure being the largest

contributor.

➜ Coronation Balanced Plus has performed well over the

year. Although the Fund had a reasonable quarter, it was

the worst performing Fund of the Solution. The 13% in

property detracted, however, the exposure to offshore

property counters will have contributed given the rand

weakness.

➜ Foord Balanced performed exceptionally well over

the quarter, outperforming the peers by 3.2% and the

inflation plus objective by over 3.5%. The high

exposure to rand hedges as well as offshore holdings

contributed over the quarter. The returns over one

year remain disappointing, with Steinhoff exposure

still detracting over the 12 months.

➜ STANLIB High Equity Tracker performed well over

the quarter, outperforming the Solution’s benchmark

and peers. This is pleasing given that we expect the

passive Fund to underperform it’s active peers as

volatility increases.


➜ We remain happy with this Solution’s overall

performance and the portfolio construction framework.

Wealth Accumulator SolutionPerformance Summary

Disclaimer

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investment, or other advice. Prospective and existing clients should be encouraged to consult their qualified Financial Advisor

before making any decision or taking any action regarding their finances. Nothing contained herein constitutes a solicitation,

recommendation, endorsement or offer by STANLIB Multi-Manager.

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property laws. The information may not be reproduced or distributed without the explicit consent of STANLIB Multi-Manager.

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property laws. The information may not be reproduced or distributed without the explicit consent of STANLIB Multi-Manager.

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Registration No: 1999/012566/07. A Financial Services Provider licensed under the Financial Advisory and Intermediary Services

Act, 37 of 2002. FSP license No. 26/10/763

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