Download 27four Asset Select Fund of Funds

27four Asset Select Fund of Funds
MONTHLY FUND COMMENTARY
June 2013
Overall Fund Performance
South African equity markets remained exceptionally volatile throughout June with the All Share Index shedding 5.70%. Much of the
capricious behaviour of the All Share Index came after statements from U.S. Federal Reserve chairman, Ben Bernanke, indicated that
quantitative easing may taper towards the end of the year with an eventual exit mid way through 2014. These statements affected the
Cyclical Resources sector the most with the sector yielding -13.53% during June. The Fund delivered -2.14% vs. the category average of 3.44%.
Asset Allocation
Offshore
Bonds
3%
Performance
SA Cash
3%
30%
25%
Offshore
Equities
21%
20%
15%
SA Equities
48%
SA Listed
Property
5%
SA Bonds
5%
10%
5%
0%
-5%
1 month
SA Income
15%
3 months
27four Asset Select FoF
6 months
YTD
1 Year
Since
Inception
South African- Multi Asset- High Equity
Commentary


June continued to see South African bonds being subjected to considerable selling pressure. As foreigners continued to be net sellers
of South African bonds, rates across the yield curve continued to soar upwards, driving bond prices lower. This despite inflation and
current account data surprising on the up side. Indication that the Federal Reserve may be more tolerant of higher long term interest
rates in the U.S resulted in a global spike in bond yields. Listed property remained volatile, recovering some of the losses sustained
during May.
Underlying contributors to performance:

Equity funds- both the Mazi Capital Met Equity Fund (down 3.27%) and the 36One Met Equity Fund (down 1.62%), outperformed
SWIX (down 3.99%).

On the SA income front, the Coronation Strategic Income Fund (down 0.29%) underperformed its strategic benchmark of 110% of
STeFi (0.45%) and the Nedgroup Core Income Fund (up 0.45%) outperformed STeFI (up 0.41%). The Momentum Bond Fund (down
1.67%) underperformed the ALBI (down 1.52%).

The Prudential Enhanced Property Tracker Fund returned 4.34% performing in line with the listed property benchmark (up 4.38%).

The Rand remained weak during June although it marginally strengthened by month end. The Investec Global Franchise Fund
delivered -3.13%, outperforming the MSCI World Index (down 4.43%). The Coronation Global Emerging Markets Fund returned
-9.54%. The Stanlib Global Bond Fund (down 3.25%) underperformed the JP Morgan Global Bond Index (down 2.72%).
Outlook
Given continued Rand weakness and the highest fuel prices on record, inflation is likely to tick upwards once again and breach the Reserve
Bank target band by year end. Reserve Bank activity is therefore likely to remain muted given the added complication of subdued economic
growth. Offshore equities continue to offer the best relative opportunity within financial markets given current valuations as well as
historically significant corporate cash balances. The correction experienced during June has ensured valuations remain reasonable,
particularly within U.S markets. This was particularly evident within high quality, dividend rich stocks within the U.S which sustained the
largest losses subsequent to insidious rising bond yields. Such stocks have been rewarded over an uncertain economic time period during
which investors placed a premium on earnings certainty. Given such fundamentals, stocks possessing such qualities are likely to continue to
thrive as the global economy muddles through a host of growth tempering challenges.
Ken Pfeiffer
I
[email protected]
I
+27 11 784 4718/30