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Intelligent Investing
June 2017
Centaur Profile
● Operating since October 2000 as Category II FSB Authorised Fund Manager.
● On 30 April 2017 Centaur had R3.7bn of AuM including:
R1,7bn – Centaur BCI Flexible Fund.
R1,5bn – Centaur BCI Balanced Fund.
● Consistent excellent performance due the “Centaur Way” investment process.
● Strong investment team of 6 individuals with over 90 years of combined experience.
● With only 2 funds Centaur has won 8 industry awards, most recently:
Morningstar Award 2016 - Best Flexible Allocation Fund ending Dec’16.
3 Raging Bull Awards in 2016.
An Efficient Benchmark
Our Benchmark has Materially Outperformed the Peer Average
Source: Moneymate, Dec’16
132%
184%
0%
20%
40%
60%
80%
100%
120%
140%
160%
180%
200%
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
CBF Benchmark cumulative vs. Balanced Fund Sector Average return
SA -Mult Asset High Equity Ave. Centaur Balanced Fund Benchmark
● Via historic simulation an efficient benchmark was derived for the Centaur BCI Balanced Fund.
● Benchmark: 28% All Share Index (J203T); 28% Financial & Industrial Index (J250T);
8% MSCI World Index;
30% JSE ALBI; 6% SARB Repo rate
Asset and Sector Allocation
Seek 1% to 2% Asset Allocation Alpha & Risk Reduction
Derive an economic model to anticipate asset prices returns.
1. Utilise proven macro indicators to guide asset and sector allocation:
Purchasing power parity
Short term interest rates
Valuations
Other: Momentum; credit extension; risk premiums; commodity prices, inflation.
2. Confirmation of indicators with real world data.
3. Scenario analysis.
4. We are modest in our ability to fine tune asset allocation and require conviction to materially
deviate from our benchmarks.
5. Willing to act boldly if warranted.
Selecting Stocks: Philosophy & Process
● Opportunity identification – 20+ heuristic models.
● “The Centaur Way” investment process.
● Top-Seg Stock Selection Engine.
● Savvy trading.
VALU
E
3 Years
Value 100%
Price 75% of Value
Value 148%
Price 100% of Value
GROWTH
Disciplined and Consistent Research Framework
Risk Management
Target 4% pre-fee Fund Alpha against Benchmark
● Appropriate benchmarks with deviations guided by conviction.
● Diversification across asset classes and factor drivers.
● Understand contingent risks and be prepared.
● Due diligence of core holdings via fundamental research.
● Position stock size according to: liquidity; inherent risks; and forecast returns.
● Be independently minded and do our own research.
● Are there any ways of taking the same risk but earning a higher return?
Centaur‘s Performance Track Record
19% p.a. return since inception & 5% outperformance of benchmark - Moneymate
Source: Centaur and Moneymate as at 30 Apr 2017.
*Benchmark: 15% RESI (J258T), 65% FINDI (J250T), 20% SA Repo. Calculated over a 2 year rolling period. The Fund’s Benchmark was changed from 50% ALSI (J203), 50% FINDI
(J213) to 15% RESI (J258), 65% FINDI (J250), 20% SA Repo on 02 July 2007 and to its current benchmark on 01 Feb 2015.
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100
200
300
400
500
600
700
800
900
'05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17
Centaur BCI Flexible Fund Relative to Benchmark since inception
CFF (Distrib. Adj) Benchmark*
Centaur BCI Balanced Fund Performance
Material outperformance of Benchmarks and Peers
As at: 30 April 2017 1 year 2 years 3 yearsSince
Inception 1
Centaur BCI Balanced Fund 13.3% 7.8% 11.6% 14.0%
Benchmark 2 7.3% 5.1% 9.2% 11.4%
Relative to Benchmark 6.0% 2.7% 2.4% 2.6%
Average category return 3.3% 2.8% 6.1%
Relative to avg. in category 10.0% 5.0% 5.5%
Ranking in category #2/206 #6/174 #1/144
Std deviation 3 – Centaur BCI Balanced Fund 7.3% 8.7% 8.1% 8.2%
Std deviation 3 – Benchmark 7.3% 9.8% 9.1% 8.8%
Source: Centaur and MoneymateNote: Past performance is not a reliable indicator of future returns.1. Inception Date: 1 July 2013.2. 28% ALSI (J203T); 28% FINDI (J250T); 8% MSCI World Index; 30% All Bond Index; 6% SARB Repo rate.3. Weekly Standard Deviation annualised.
Centaur BCI Balanced Fund Performance
Source: Moneymate, Centaur as at 30 Apr 2017.
*Benchmark: 28% ALSI (J203T); 28% FINDI (J250T); 8% MSCI World Index; 30% All Bond Index; 6% SARB Repo rate
Best performing fund in category over 3 years as at 30 April 2017! – Moneymate
90
100
110
120
130
140
150
160
170
Jun'13 Dec'13 Jun'14 Dec'14 Jun'15 Dec'15 Jun'16 Dec'16
Centaur BCI Balanced Fund Relative to Benchmark since inception
CBF (Distrib. Adj) Benchmark *
Market Outlook
SA Equities Bonds/Prop Offshore Cash
Status Quo 4 1 2 2
Hyperinflation 2 4 1 3
Positive ∆ Regime 1 2 4 3
1=Best performer; 4=Worst performer
SA investment outlook dominated by politics - 3 scenarios:
1. Status quo: Deflationary, SA equities mediocre, ZAR stable, fixed income best.
2. Pro-Market change in regime: Country and ZAR will react positively, and
growth can accelerate to 3%+ in time.
3. Hyperinflation: Populism/ loss of SARB Independence/ wealth destruction like
Venezuela.
Asset Allocation
Centaur BCI Balanced Fund Asset Allocation:
Assets 24 May ‘17 Benchmark Diff.
Fixed Income 38% 36% 2%
SA Bonds 20%30% -4%
Duration 1.7 vs Benchmark 2.2
6% Investment in income funds.SA Property 6%
Preference Shares 5% - 5% Expected returns 13% p.a.
Cash 7% 6% 1% 3% in offshore cash.
Equities 62% 64% -2%
JSE Equity 48% 56% -8%
World Equities 14% 8% 6% Increase exposure selectively.
Total 100% 100%
Source: Maitland, Centaur
Conclusion
Centaur is Well Placed to Continue Delivering Alpha
● Excellent and consistent performance over many years.
● Experienced and stable team.
● Time tested investment processes which are well placed to outperform.
● Unique and independent approach to investment.
● Current environment favours Centaur as savvy stock pickers and experienced traders.
Contact Details and Disclosures
Centaur Asset Management (Pty) Ltd is an authorised Financial Service Provider FSP 647.
Valuation takes place daily and prices can be viewed on BCI’s 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.
Contact Details
Tel: 021 685 2408
E-Mail: [email protected]
Website: www.centaur.co.za
Physical address: Great Westerford Building, 240 Main Road, Rondebosch,
Cape Town, 7700
Postal address: P.O. Box 35, Newlands, 7725
Management Company Information
Boutique Collective Investments (RF) (Pty) Limited
Catnia Building, Bella Rosa Office Park, Durban Road, Bellville, 7530
Tel: 021 007 1500/1/2
Fax: 086 502 5319
Email: [email protected]
Website: www.bcis.co.za
Custodian / Trustee Information
The Standard Bank of South African Limited
Tel: 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
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. BCI reserves the right to close 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, free of charge. Performance fees are 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 are from Moneymate,
as at the date of this report 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 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/the Manager’s products.