FEBRUARY 2014 2013 was a very busy year for Sygnia. We entered the retail market by launching a LISP platform, a range of savings products and a series of unit trusts, we grew our assets under management to over R100 billion, and concluded a successful BEE transaction which saw 20% of the equity in Sygnia Asset Management being allocated to our qualifying black staff members. 2013 was also a year of great investment performance, with all of Sygnia’s Signature multi-manager products coming in first in the Alexander Forbes Multi-manager survey. Our longer-term track record (3 and 5 years) looks equally impressive. Sygnia Performance Update Sygnia Investment Team COMES OUT TOPS Our investment team from left to right: Nitisha Singh; Jemy Stephen; Rian Brand; Iain Anderson; Michael Curran; Simon Peile; Narassa Govender; Duane Gilbert; Joseph Taboola; Willem van der Merwe; and Needa Prinsloo.
Transcript
FEBRUARY 2014
2013 was a very busy year for Sygnia. We entered the retail market by launching a LISP platform, a range of savings products and a series of unit trusts, we grew our assets under management to over R100 billion, and concluded a successful BEE transaction which saw 20% of the equity in Sygnia Asset Management being allocated to our qualifying black staff members.
2013 was also a year of great investment performance, with all of Sygnia’s Signature multi-manager products coming in first in the Alexander Forbes Multi-manager survey. Our longer-term track record (3 and 5 years) looks equally impressive.
Sygnia Performance Update
Sygnia Investment Team
COMES OUT TOPS
Our investment team from left to right: Nitisha Singh; Jemy Stephen; Rian Brand; Iain Anderson; Michael Curran; Simon Peile; Narassa Govender; Duane Gilbert; Joseph Taboola; Willem van der Merwe; and Needa Prinsloo.
Alexander Forbes Multi-Manager Low Equity to 31 December 2013
6 Months
1 Year
Sygnia Signature 40 Fund
IS 37.5% Equity
Momentum Enhanced Factor 4
IS Low Equity
Momentum Enhanced Factor 3
11.7%
10.3%
8.6%
8.3%
7.6%
Sygnia Signature 40 Fund
IS 37.5% Equity
IS Low Equity
AF Medium Conservative
Momentum Enhanced Factor 4
AF Conservative
Momentum Enhanced Factor 3
20.2%
15.1%
12.2%
12.1%
11.7%
9.8%
9.2%
3 Years
Sygnia Signature 40 Fund
IS 37.5% Equity
IS Low Equity
Momentum Enhanced Factor 4
AF Medium Conservative
AF Conservative
Momentum Enhanced Factor 3
15.2%
13.9%
12.4%
11.9%
11.1%
10.5%
10.3%
5 Years
Sygnia Signature 40 Fund
IS 37.5% Equity
AF Medium Conservative
IS Low Equity
AF Conservative
13.8%
13.1%
12.1%
11.6%
11.1%
Alexander Forbes Multi-Manager Low Medium Equity to 31 December 2013
6 Months
Sygnia Signature 50 Fund
SMM 50
IS Medium Equity
Momentum Classic Factor 5
Momentum Enhanced Factor 5
13.1%
12.4%
12.2%
9.8%
9.8%
1 Year
Sygnia Signature 50 Fund
IS Medium Equity
SMM 50
AF Medium Growth
Momentum Classic Factor 5
Momentum Enhanced Factor 5
22.5%
18.5%
18.0%
15.5%
15.1%
15.0%
3 Years
Sygnia Signature 50 Fund
IS Medium Equity
SMM 50
Momentum Classic Factor 5
Momentum Enhanced Factor 5
AF Medium Growth
16.4%
15.3%
14.4%
13.9%
13.7%
13.4%
5 Years
Sygnia Signature 50 Fund
IS Medium Equity
SMM 50
AF Medium Growth
15.7%
14.9%
14.3%
13.6%
Alexander Forbes Multi-Manager Medium Equity to 31 December 2013
6 Months
1 Year
3 Years
5 Years
Alexander Forbes Multi-Manager High Equity to 31 December 2013
6 Months 1 Year
Sygnia Signature 60 Fund
Momentum Classic Factor 6
Momentum Enhanced Factor 6
IS 62.5% Equity
SMM 60
27Four CPI +5%
14.4%
14.2%
14.0%
13.9%
13.1%
11.6%
Sygnia Signature 60 Fund
Momentum Classic Factor 6
Momentum Enhanced Factor 6
IS 62.5% Equity
27Four CPI +5%
AF High Medium Growth
SMM 60
24.4%
23.3%
22.6%
21.4%
20.3%
18.2%
18.1%
Momentum Classic Factor 6
Sygnia Signature 60 Fund
Momentum Enhanced Factor 6
IS 62.5% Equity
SMM 60
AF High Medium Growth
17.8%
17.6%
17.2%
16.3%
14.8%
14.7%
Sygnia Signature 60 Fund
Momentum Enhanced Factor 6
IS 62.5% Equity
SMM 60
AF High Medium Growth
17.6%
16.9%
16.1%
15.4%
14.7%
SYmmETRY Aggressive
Sygnia Signature 70 Fund
SMM 70
Momentum Classic Factor 7
Momentum Enhanced Factor 7
IS High Equity
IS Entrepreneur
27Four CPI +7%
16.3%
16.1%
15.8%
15.7%
15.5%
15.3%
14.4%
14.0%
Sygnia Signature 70 Fund
SYmmETRY Aggressive
Momentum Classic Factor 7
Momentum Enhanced Factor 7
27Four CPI +7%
IS High Equity
SMM 70
AF High Growth
IS Entrepreneur
26.7%
26.6%
25.9%
25.6%
24.4%
23.5%
23.0%
22.2%
20.2%
Alexander Forbes Multi-Manager High Equity to 31 December 2013 continued
3 Years 5 Years
Momentum Classic Factor 7
Momentum Enhanced Factor 7
Sygnia Signature 70 Fund
SYmmETRY Aggressive
IS High Equity
AF High Growth
SMM 70
IS Entrepreneur
19.1%
18.6%
18.2%
17.4%
17.2%
16.4%
16.3%
15.2%
Sygnia Signature 70 Fund
Momentum Enhanced Factor 7
IS High Equity
SYmmETRY Aggressive
IS Entrepreneur
SMM 70
AF High Growth
18.6%
18.3%
17.3%
17.1%
16.9%
16.8%
16.5%
From a performance attribution perspective, the following decisions contributed significantly to our returns during the year:
• Exiting our gold exposure in January• Reducing our exposure to emerging markets equities in January• Exiting the FTSE/JSE DIVI Index tracker in May• Down-weighting global fixed interest exposure in favour developed market equities in June and completely exiting our exposure to emerging markets equities at the same time.
Through the year we became increasingly concerned about the risks inherent in holding domestic sovereign bonds and we made a number of changes to our portfolios to protect them in the event of a sell-off by foreign investors, including mandating our fixed interest managers to be able to hold a wider variety of fixed interest assets, introducing a fixed interest portfolio with a capital protection mandate into our lower risk portfolios, moving assets out of longer duration fixed interest portfolios into ‘cash plus’ portfolios, down-weighting our listed property exposure and in our lower-risk portfolios, which typically hold a high proportion of bonds, reducing domestic bond exposure in favour of exposure to developed market equities.
Our funds of South African hedge funds continued to occupy the first place in the Alexander Forbes Fund of Hedge Funds survey. We now have a ten year track record of managing funds of hedge funds and have demonstrated that an exposure to well-selected and blended hedge funds can significantly improve the risk and return characteristics of any well-diversified portfolio.
Alexander Forbes Low Risk FoHF Survey to 31 December 2013
6 Months 3 Years
1 Year 5 Years
Sygnia Absolute FoHF
Alpha Saturn
Caveo Moderate
Blue Ink Yellowwood
Momentum ZAR Diversified
Alpha Cautious
Caveo Stable
Blue Ink Fixed Income Arbitrage
TriAlpha Enhanced Fixed Income
Alpha Fixed Income
8.4%
7.1%
6.3%
6.3%
5.9%
5.1%
4.7%
2.9%
2.8%
0.2%
Sygnia Absolute FoHF
Caveo Moderate
Caveo Stable
Alpha Saturn
Alpha Cautious
Momentum ZAR Diversified
Blue Ink Yellowwood
TriAlpha Enhanced Fixed Income
Blue Ink Fixed Income Arbitrage
Alpha Fixed Income
14.4%
9.9%
8.7%
8.4%
7.3%
7.0%
6.3%
3.5%
-4.3%
-6.3%
Sygnia Absolute FoHF
Caveo Moderate
Caveo Stable
Alpha Saturn
Blue Ink Yellowwood
Momentum ZAR Diversified
Alpha Cautious
Alpha Fixed Income
11.5%
10.5%
9.1%
8.7%
8.6%
8.2%
7.4%
6.3%
Sygnia Absolute FoHF
Caveo Moderate
Caveo Stable
Alpha Saturn
Momentum ZAR Diversified
Blue Ink Yellowwood
Alpha Cautious
Blue Ink Fixed Income Arbitrage
Alpha Fixed Income
11.9%
10.6%
9.3%
8.8%
7.3%
7.3%
6.9%
5.8%
2.7%
Alexander Forbes High Risk FoHF Survey to 31 December 2013
6 Months
3 Years
1 Year
5 Years
Alpha Equity
Blue Ink Equity Aggressive
Sygnia All Star FoHFs
Caveo Focus
Caveo Performance
Edge Iconic Matador
27Four Alternative Equity
Sygnia Signature FoHFs
Blue Ink Meteor
Edge Iconic Absolute Return
12.3%
12.0%
11.5%
11.5%
10.2%
10.1%
9.9%
9.7%
8.1%
7.1%
Sygnia All Star FoHFs
Caveo Focus
Edge Iconic Matador
27Four Alternative Equity
Blue Ink Equity Aggressive
Alpha Equity
Sygnia Signature FoHFs
Caveo Performance
Edge Iconic Absolute Return
Blue Ink Meteor
21.1%
20.0%
19.2%
17.7%
17.6%
16.9%
16.8%
14.3%
7.6%
7.5%
Sygnia All Star FoHFs
Sygnia Signature FoHFs
Caveo Performance
Blue Ink Equity Aggressive
Blue Ink Meteor
16.5%
13.8%
13.3%
12.8%
8.3%
Sygnia All Star FoHFs
Sygnia Signature FoHFs
Caveo Performance
Blue Ink Meteor
14.9%
13.0%
12.4%
8.7%
SYGNIA ALL STAR FOHFS
SYGNIA SIGNATURE FOHFS
SYGNIA ABSOLUTE FOHFS
ALL BOND INDEXCASH
ALL SHARE INDEX
10 Year Risk Return Scatterplot to 31 December 2013
25%
20%
15%
10%
5%
0%
Ret
urn(
p.a.
)
0% 5% 10% 15% 20%Risk(p.a.) (standard deviation)
LARGE MANAGER WATCH MEDIAN (GLOBAL BALANCED)
MSCI WORLD INDEX (SA RAND)
All information and opinions provided are of a general nature and are not intended to address the circumstances of any particular individual or entity. We are not acting and do not purport to act in any way as an advisor or in a fiduciary capacity. No one should act upon such information or opinion without appropriate professional advice after a thorough examination of a particular situation. We endeavour to provide accurate and timely information but we make no representation or warranty, express or implied, with respect to the correctness, accuracy or completeness of the information and opinions. We do not undertake to update, modify or amend the information on a frequent basis or to advise any person if such information subsequently becomes inaccurate. Any representation or opinion is provided for information purposes only Sygnia Asset Management is a registered Financial Services Provider.
And finally the Sygnia International Balanced Fund has done extremely well for investors, delivering a 23.9% return in US dollar terms and a 52.7% return in Rand terms over the past 12 months, well in excess of its benchmark.
Our investment team has worked hard to navigate very difficult investment markets and to ensure that our clients benefit from the strong performance of our products. Given the volatility and continually changing dynamics of our markets, 2014 looks like another challenging year.
We have started the year by up-weighting our resources exposure by switching half of our investment in the FTSE/JSE SWIX Index tracker to the FTSE/JSE All Share Index tracker. Our domestic equity exposure has been cut by 3% on the back of the risk of further sell-offs of emerging markets. We remain cautious of the local government bond market as it has become clear that the US Federal Reserve is determined to normalise its monetary policy with the view of stopping quantitative easing altogether by the end of the year. We have thus switched a lot of our fixed interest exposure to the corporate sector, while remaining underweight in bonds as a whole. We are managing our products with a maximum exposure to offshore assets on anticipation of further currency weakness. Within the international fund, we remain over-weight equities and developed markets, with a tilt towards the US. In these volatile times for emerging markets we also have a maximum allocation to funds of hedge funds as a core stabiliser of returns. We are also lifting our exposure to Africa in a very risk-controlled manner to 3% in order to further diversify our currency exposure.
Please let me know if we can be of any assistance.
