View in PDF
The current market is characterised by political uncertainty and multiple global economic issues. The main issues affecting the South African market are Rand volatility, emerging market woes and political and policy uncertainty.
The Rand has weakened significantly against the major currencies (-19.4% YTD against the USD) benefiting South African investors invested in developed offshore markets. The Nasdaq market has shown sharp increases year-to-date (+17.5%), with the JSE All Share Index marginally down year-to-date (-1.4%).
| ||31 Aug ‘18||31 Jul ‘18||31 Dec ‘17|
|JSE ALSI||58 669||57 433||59 505|
|Nasdaq||8 110||7 672||6 903|
The portfolio performed well in August, benefitting from the good results from FirstRand and Discovery locally and from Amazon and Nvidia offshore. Rand weakness also had a positive impact on the portfolio. Aspen also had a good run in August (but sharply down in September after unimpressive results).
Approximately 38% of the portfolio is offshore. 16% of the portfolio is in Cash; 30.6% is in the Technology sector; 18.7% in Financials; and 17.1% in Biotechnology.
We continually seek opportunities in our preferred investment themes to deploy our cash, but remain patient until the right opportunities present themselves.
Thought for the Day: Patience
“The stock market is a device for transferring money from the impatient to the patient” Warren Buffett.
The South African stock market is certainly testing the patience of investors in the local market. A strategy of regular (monthly) investments in good quality investments generally pays off well over the long-term. There is a lot of noise on a daily basis that can really mess with an investor’s mind. Typically, when sentiments are low, stocks are cheap and vice versa. Unfortunately, stock prices can remain high or low for extended periods of time truly testing the patience of investors. Investors are tested further, when a correction does occur, as these can be quite sharp rises or falls in the stock market.
The patient investor who has a regular investment in good quality businesses, who ignores daily gyrations in the markets will generally do well over the long-term.
Clients invested in the Lunar BCI Worldwide Fund can obtain statements, tax certificates or transact online at: https://www.bci-transact.co.za/Webclient/Login
Investors considering an investment in the Lunar BCI Worldwide Flexible Fund can obtain more information at www.lunarcapital.co.za and obtain application forms at https://www.lunarcapital.co.za/forms/
DISCLAIMER: This research report (“report”) is confidential, issued for the information of clients of Lunar Capital (Pty) Ltd (“Lunar”) and may not be issued to members of the, nor published in, public. The information, research and opinions contained herein have been formulated in good faith and where applicable have been derived from published sources generally reliable and believed to be fair, however the information, research and opinions, as the case may be, are not warranted to be complete or accurate. Lunar does not assume liability or responsibility for their form, sufficiency or accuracy. Any person making use of this report does so entirely at his or her own risk. Lunar does not assume liability for any losses arising from any errors or omissions in this report, irrespective of whether there has been any negligence, including gross negligence, by Lunar, its affiliates, officers or employees, and whether such losses are direct, indirect or consequential. This report is neither an offer nor a solicitation to buy or sell, and is not intended to call attention to, or to market, or promote the services of Lunar. Lunar does not have a proprietary interest, other than a possible casual or arbitrage interest, in any of the listed companies referred to herein and no director of Lunar, unless otherwise stated in this report, is a director of the companies referred to herein. Lunar Capital (Pty) Ltd, FSP 46567, Reg No. K2015013022. Collective Investment Schemes in securities (CIS) are generally medium to long term investments. The value of participatory interests may go down as well as up and past performance is not necessarily a guide to the future. CIS are traded at ruling prices and can engage in borrowing and scrip lending. A schedule of fees and charges and maximum commissions is available on request from the company/scheme. Commissions and incentives may be paid and if so, would be included in the overall costs. The Unit Trust portfolios are licensed under the Boutique Collective Investments Scheme. Boutique Collective Investments is a full member of the Association for Savings & Investments SA.