The Arysteq Global Opportunities Fund has a 1-year ranking of 11 out of 94 offshore funds registered in South Africa. The 1-year performance of the fund is -5.1% vs that of the South African peer group median at -13.3% (see graph 1).
Graph 1: Fund vs Peer Group Returns (Dec 2022)
Source: Arysteq
2022 was undoubtedly one of the more challenging years since our business has been in existence. Tighter monetary policy and higher-than-average inflation contributed to a major correction in the global stock market. To place matters into perspective, the MSCI World Index returned -17.7% for the year, while the Nasdaq Composite fared even worse, losing a total of 32.5% during the same period. The SA stock market (JSE All Share Index) outperformed its global peers and yielded a positive return of 4.0%, due largely to the materials and energy sectors which benefited from historically high commodity prices for much of the year, and the banking sector which unwound some of the large provisions raised in 2020/2021. In addition to this, the South African Rand depreciated -6.9% against the USD in 2022, which benefitted our exposure to offshore companies in our stable.
The top 10 equity holdings in this fund comprise BMW, BP, Nintendo, British American Tobacco, Pfizer, Biogen, Itochu, Verizon Communications, Alibaba Group Holdings and, Bank of China. From a sector perspective, we are overweight Consumer stocks, Financials, Healthcare, and Energy with our geographical view taking an underweight position in the US (see graph 2). No changes were made to the holdings in the portfolio over the last quarter.
Graph 2: Geographical Exposure (Dec 2022)
Source: Arysteq
The Arysteq Balanced Fund has a 1-year ranking of 5 out of 13 funds registered in Namibia in this mandate category. The 1-year performance of the fund is 2.1% vs that of the Namibian peer group median at 1.0% (see graph 3).
Graph 3: Fund vs Peer Group Returns (Dec 2022)
Source: Arysteq
The focus for 2023 will be on whether inflation and the FED have peaked. Consumers across the globe continue to feel the pain of higher prices for both goods and services. Households are under pressure, not only at the store counters but even more so in paying down debt with interest rates back at normal levels experienced before the start of COVID. We continue to position our portfolios in a way to take advantage of current market dynamics and finds opportunities in the midst of the downturn we saw in 2022. So, when you’re at the service station filling up your car next week, take some comfort in the fact that some of your monthly expenses will be returned in dividend income through your investment in Shell!
Over the last quarter, we maintained our portfolios in line with our strategic asset allocation and no changes were made to the holdings.
The top 10 equity holdings in this fund comprise SBN Holdings, British American Tobacco, BHP Group, Anglo American, BMW, BP, Nintendo, Standard Bank Group, Pfizer, and Richemont.
The Arysteq Real Return Fund has a 1-year ranking of 3 out of 6 funds registered in Namibia in this mandate category. The 1-year performance of the fund is 2.9% vs that of the Namibian peer group median at 2.1% as well (see graph 4).
Graph 4: Fund vs Peer Group Returns (Dec 2022)
Source: Arysteq
The overall allocation in this fund was maintained over the last quarter. While no changes were made to the holdings, the fund was well positioned and we ended the year with positive performance. With inflation remaining at elevated levels for longer, the defensive nature of this portfolio is set to hold up well in times of market stress.
The top 10 equity holdings in this fund comprise SBN Holdings, British American Tobacco, BMW, BP, Nintendo, BHP Group, Pfizer, Anglo-American, Biogen, and Itochu.
The Arysteq Money Market Fund has remained number 1 in the Namibian market over the last quarter. Changes to the portfolio mainly included rolling of maturities into higher-yielding instruments for the quarter ended 31 December 2022. The expectations for interest rates in the new year is largely dependent on inflation, what the FED decides to do going forward and recessionary fears becoming a pervasive concern across the globe. The first Bank of Namibia MPC meeting is scheduled for 15 February 2023.
Graph 5: Fund vs Peer Group Returns (Dec 2022)
Source: Arysteq
