Trillian Fund Fact Sheet September 2014

1
TRILLIAN ASSET MANAGEMENT
IP MANAGEMENT COMPANY
SEPTEMBER 2014
TRILLIAN IP FCF EQUITY FUND
FACT SHEET
KEY FACTS
INVESTMENT STRATEGY
This is a domestic general equity fund that aims to provide sustainable
capital appreciation over the medium to long term. To achieve this
objective the portfolio manager will invest primarily in equity securities of
companies that generate superior free cash flow (FCF). The securities in
the portfolio will consist of equity securities listed on exchanges and
assets in liquid form. The portfolio may invest in collective investment
schemes. Where these schemes are operated outside South Africa they
will be included only where the regulatory environment provides investor
protection at least equal to that in South Africa. Financial instruments may
also be included. Nothing shall preclude the manager from varying the
ratios of securities to reflect changing economic and market conditions,
and from retaining cash or placing cash on deposit. The manager
reserves the right to close the portfolio to new investors.
SUITABLE FOR INVESTORS WHO:
· Seek exposure to JSE-listed equities to provide long-term capital growth
· Are comfortable with short-term volatility which may see the value of the
fund move up and down
· Are prepared to take on the risk of capital loss
· Have an investment horizon of greater than three years
INVESTMENT GROWTH SINCE INCEPTION
Management fee
Fund size
Manager
Benchmark
ASISA Sector
Fund inception
Phone
Email
1.14%
R18.3m
Jan Faure
FTSE/JSE All Share Total
Return ZAR
General Equity
20 February 2013
+27 11 707 1367
[email protected]
TOTAL EXPENSE RATIO AND
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PERFORMANCE FEE
The total expense ratio (TER) for this
portfolio/class of participatory interest is
1.58% p.a. The fund is allowed to charge a
performance fee of 20% of any returns above
the benchmark over a rolling one year basis.
The performance fee is included in the TER
when applicable. Fund returns are quoted
after all fees and expenses, so the TER
should not be deducted from fund returns.
RISK MEASURES (since inception)
Fund Benchmark
2
79%
68%
Positive months
3
11.6%
Annualised volatility 6.0%
4
0.34
0.25
Sharpe Ratio
TRILLIAN FCF EQUITY –
TOP HOLDINGS AT 30 SEPTEMBER
STEINHOFF
GILEAD
CASH
SASOL
REINET
YAHOO
NAMPAK
RCL FOODS
APPLE
ASPEN
BUSINESS
CONNEXION
PERFORMANCE FOR THE MONTH
The fund returned 0.33% (after fees and expenses) for the month of
September. In contrast, the fund's benchmark (the FTSE/JSE All Share
Total Return Index) returned -2.58% for the month.
SHF
GILD
SOL
REI
YHOO
NPK
RCL
AAPL
APN
6.12%
5.96%
5.31%
5.01%
4.83%
4.63%
4.48%
3.89%
3.78%
3.67%
BCX
3.49%
1. 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.
2. The percentage of calendar months in which the Fund
produced a positive monthly return since inception.
3. The standard deviation of the Fund’s monthly return.
This is a measure of how much an investment’s return
varies from its average over time.
4. The Sharpe ratio measures risk-adjusted
performance. The greater the Sharpe ratio, the better
the fund's risk-adjusted performance.
IP Management Company
3rd Floor, Letterstedt House, Newlands-on-Main, Newlands, 7700.
P O Box 23271, Claremont, 7735.
T +27 21 671 1650 F +27 86 557 4848
e-mail: [email protected]
An Authorised Financial Services Provider (FSP 42081)
TRILLIAN ASSET MANAGEMENT
IP MANAGEMENT COMPANY
SEPTEMBER 2014
TRILLIAN IP FCF EQUITY FUND
FACT SHEET
The fund’s peer group median performance in the ASISA general equity category was -2.16% for the month.
The outperformance of the fund (+2.91%) relative to the index is as a result of the selection of shares the
fund holds.
MONTHLY RETURNS
Monthly
Returns
JAN
FEB
2013
2014
-2.97
+3.23
MARCH
APRIL
MAY
JUNE
JULY
AUG
SEPT
OCT
NOV
DEC
TOTAL
+0.26
-0.18
-0.75
+0.57
+0.81
+1.54
+4.14
+3.75
+0.38
+2.81
+13.99
+2.08
+2.73
+1.81
+1.42
+2.02
-0.32
+0.33
+10.66
FUND COMMENTARY
The fund ended the month of September in the green which was no mean feat. For the third quarter, the
fund returned 2.03% while our benchmark (“the market”) returned -2.13%. The outperformance of 4.16%
was largely due to the strong rand hedge qualities of the fund as well as a lower allocation to resources than
our benchmark.
The third quarter of 2014 saw the rand lose just over 6% in value against the US Dollar. The reasons for this
were both locally induced as well as driven by external factors. Below par economic growth driven virtually
by all local sectors has created an uncertain environment for foreign investors. The quarter has seen poor
readings for mining production, manufacturing production and GDP (and let’s not get started on budget and
current account deficits). It all paints a pretty dire picture for the rand. Externally, virtually all currencies
around the world are weakening against the US Dollar. The US is, for now, in recovery mode. The prospect
of the Federal Reserve raising interest rates, as monetary policy naturally tightens with economic recovery,
has all major and emerging currencies on the back foot.
What does this all mean for our fund? We will continue to have rand hedging as a major theme in the fund.
We are currently at maximum offshore equity exposure and have a healthy allocation to local rand hedge
shares. The fund has made a point not to over expose to any one company or sector and this helped our
fund in light of the heavy sell off in resource shares over the last month. Importantly, our Sharpe ratio (a
measure of risk adjusted returns) has remained ahead of the market.
Collective investments are generally medium to long term investments. The value of units may go down as well as up and past performance is not necessarily a
guide to the future. Collective investments are traded at ruling prices and can engage in borrowing and scrip lending. All fees are quoted excluding VAT. The fund
manager may borrow up to 10% of the market value of the portfolio to bridge insufficient liquidity. Collective investments are calculated on a net asset value
basis, which is the total value of all assets in the portfolio including any income accrual and less any permissible deductions from the portfolio. All transactions
must be received before 14:30 while the fund is valued at 15:00 (Quarter end: 17:00). The scheme may be closed for new investments. A schedule of fees and
charges and maximum commissions is available from the management company/scheme. Different classes of units apply to this fund and are subject to different
fees and charges. Commission and incentives may be paid and if so, would be included in the overall costs. Forward pricing is used. The following charges are
levied against the portfolio: Brokerage and marketable securities tax, auditor's fees, bank charges, trustee fees. IP Management Company is a member of ASISA.
The Trustees for the scheme are Standard Bank of South Africa Ltd.
IP Management Company
3rd Floor, Letterstedt House, Newlands-on-Main, Newlands, 7700.
P O Box 23271, Claremont, 7735.
T +27 21 671 1650 F +27 86 557 4848
e-mail: [email protected]
An Authorised Financial Services Provider (FSP 42081)

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