Page 163 - Profile's Unit Trusts and Collective Investments 2021 issue 2

Fund Manager Interviews

Chapter 9
Fund Manager Interviews
Fund Manager Interviews

NQF
Relevant to
The fund manager interviews presented in this chapter provide a fascinating insight into 119997: 3
the different approaches to investment management required by different types of 242594: 2, 3
collective investment schemes, and the differing views for the future. The interviews 243130: 2, 3
243148: 2
are comments from fund managers about the way in which they manage their funds, 243153: 4
how they make investment decisions, what they anticipate for the year ahead and, in
some cases, specific shares which they fancy.
For this issue, a selection of top performing funds was made in order to present both the major
collective investment scheme managers and a cross-section of categories (general equity, specialist
equity, bond funds, hedge funds, etc). The managers of all the funds selected were invited to
contribute. Not all those invited were able or willing to make a contribution, so the interviews
included here do not necessarily cover all the sectors which we would like to cover.
In addition to the comments provided by each fund manager, we also show the one and three
year lump sum returns (NAV to NAV, dividends reinvested) for each featured fund, the average
performance of the sector, and inflation for the period. The performance figures are annual
compound returns (CAGR).
Bear in mind that the performance figures for each fund are not simply a function of each
manager’s approach or skill. With the exception of hedge funds and some multi asset funds, the
mandates of unit trusts require the fund manager to remain invested in particular sectors or asset
classes regardless of the state of the markets. This means that a fund manager’s choices in a bear
market might be limited to switching part of the portfolio from growth shares to defensive stocks.
In short, the performance figures often reflect sector performance as well as manager performance.
The interviews reveal both the different approaches of different managers, and the significant
effect of sector choice. The manager of a specialist theme fund, for example, works on the
assumption that investors in the fund want to be fully invested in that sector. He will see his job as
outperforming the fund’s benchmark (and his peers); not making asset allocation choices.
In other words, the manager of a theme fund is not striving for an absolute return. This makes
the choice of sector (and fund) very important from the investor’s point of view.

Absa Bond Fund

Sector: South African–Interest Bearing–Variable Term
Fund manager: James Turp
Benchmark: BEASSA All Bond index

Returns to investors 1 year 3 years
Absa Bond Fund 13.53% 10.43%
Sector Average 13.38% 7.89%
Inflation (CPI) 4.87% 3.85%
ProfileData performance stats to 30 June 2021: CAGR with dividends reinvested

Please describe your investment universe.
The Absa Bond Fund invests in South African bonds, corporate bonds, gilts, fixed deposits and
other interest bearing instruments, with either short, intermediate or long terms to maturity,
being non-equity securities or securities purchased through exchanges in South Africa or as may be
permitted in terms of the Act or any of its superseding legislation. The Absa Bond Fund may also
be invested in the derivatives of these assets as determined by legislation from time to time.

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Profile’s Unit Trusts & Collective Investments — Understanding Unit Trusts