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    Seed Weekly - First Quarter 2017 Update - Multi-Asset Funds

    The year started on a positive note for investors with assets positive over the first quarter, albeit through volatile markets. Local politics again was a major talking point, particularly at the end of the quarter when the cabinet reshuffle led to a fallout and subsequently a credit ratings downgrade to sub-investment grade.

    Ian covered the implications of the credit ratings downgrade for investors in his article last week (view article), and further discussed the importance of Multi-Asset Funds in such times. These funds offer diversification benefits through exposure to different asset classes, which helps to soften the blow in volatile markets. Part of our philosophy is managing risk and, as such, Multi-Asset Funds are a key area of focus for Seed.

    Asset Class Performance First Quarter 2017

    Figure 1: Local Asset Class Performance

    Source: Morningstar Direct (11 April 2017)

    In spite of the elevated risk levels within the markets, investors enjoyed a fairly good start to the year with the various asset classes ending positive. The politics-induced turmoil at the end of March was not enough to counter the gains over the quarter. Equity was the top performing asset class, the FTSE/JSE All Share Index gaining 3.8% over the quarter. Listed property had the weakest quarter while bonds fared better, benefiting from Emerging Market flows, although understandably slumping at the end of March on politics.

    Seed Balanced Fund

    Fund Launch : 04 June 2010

    Our flagship fund, the Seed Balanced Fund, had a good quarter delivering top quartile (Top 25%) performance relative to peers in the ASISA South African Multi-Asset High Equity category. Figure 2 below illustrates that on a rolling 3-year basis, the Fund has protected capital and outperformed the average of the peer group all of the time since inception (46 out of 46 times). The rolling outperformance has been consistent with the Fund ranking in the top half of the funds 91% of the time, and top quartile 63% of the time. The long-term outperformance is a result of running a diversified portfolio comprising carefully selected uncorrelated strategies which complement each other well.

    Figure 2: Seed Balanced Fund 1 Year Rolling Performance relative to Peers

    Source: Morningstar Direct (11 April 2017)

    Seed Stable Fund

    Fund Launch : 09 January 2012

    Over the quarter, the Seed Stable Fund also delivered top quartile performance relative to peers. Figure 3 below illustrates that on a 1 year rolling basis, the Fund has outperformed the average of the peer group 86% of the time (42 out of 49 times). The Fund has protected capital well and ranked in the top half of funds within the ASISA South African Multi-Asset Low Equity category 82% of the time, and 59% in the top quartile. The Fund has also benefitted from carefully selected uncorrelated strategies to manage risk and deliver outperformance.

    Figure 3: Seed Stable Fund 1 Year Rolling Performance relative to Peers

    Source: Morningstar Direct (11 April 2017)

    A long term multi-asset strategy is essential for investors, especially in volatile times when risk is elevated. There are numerous Multi-Asset categories to choose from, and this is a key area of focus for us. We express our best ideas in our portfolios which comprise appropriate uncorrelated strategies, blended together to minimise the risk while optimising returns for investors.

    Kind regards,

    Tawanda Mushore

    Tel +27 21 914 4966
    Fax +27 21 914 4912
    Email info@seedinvestments.co.za

    Please click here to view our disclaimer. For more information please visit our website.

    Permalink2017-04-12, 09:35:30, by Mike Email , Leave a comment
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