Page 164 - Profile's Unit Trusts & Collective Investments - March 2025

CHAPTER 9

Please comment on the year ahead and, if possible, estimate the performance of your fund
over 2 or 3 years. What are your targets and objectives for the year ahead?
The return objective for this fund is to beat its benchmark. Therefore, the objective and targets
for this fund whether for the year ahead or over 2 to 3 years remains the same, that is performing
better than the average of its peers in the South African-Multi Asset-Medium Equity.

Are equity markets in general overpriced? Do you anticipate a significant correction or will
the bull run continue?
We believe that this depends on the regions concerned. We see most emerging markets trading
below their historical average valuations suggesting that there is good value in emerging markets.
A similar pattern can also be observed in the UK and the EU. The US market is trading above its
historical average valuation so there is a credible argument to be made that some of the US-market
pockets are overpriced.
Which asset classes do you expect will give the best total rates of return over the next few
years?
In as much as we would love to make predictions on asset classes, we have come to learn that
these are very cyclical and are dependent on prevailing macro-conditions at a particular time which
are very difficult to predict into the future. We therefore advocate for portfolios that are always
diversified across asset classes, strategies, and regions which on a longer-term period give clients a
much higher probability of a far better outcome than the portfolios that are not diversified.
Could you identify three shares that fall within your universe that you think will perform well
in the medium term?
We use the building block framework to construct our portfolios by utilising the Fairtree
managers and strategies. On a look through basis our current top three overweight positions in
this portfolio are: Naspers Ltd., Prosus NV and FirstRand Ltd. We think these will perform well
in the medium term.

H4 Worldwide Equity Fund

Sector: Worldwide–Equity–General
Portfolio manager: Yolanda Naudé
Benchmark: 35% South African - Equity - General & 65% Global - Equity - General
Returns to investors 1 year 3 years
H4 Worldwide Equity Fund 15.64% 9.89%
Sector Average 13.57% 8.50%
Inflation (CPI) 3.02% 5.10%
ProfileData performance stats to 31 December 2024: CAGR with dividends reinvested

Please describe your investment universe.
The H4 Worldwide Equity Fund has the objective of achieving maximum capital appreciation
over time. The benchmark of the fund is the combination of 35% (ASISA) SA Equity General peer
group average and 65% (ASISA) Global Equity General peer group average. To beat this
benchmark over time, the fund typically primarily invests in listed equity locally and globally, but it
may also invest in fixed interest securities, listed real estate, managed volatility equity solutions
and cash. Active currency management is also allowed, and used from time to time.
Please comment on your investment year (January - December 2024) from a fund manager’s
point of view.
The fund delivered 15.6% between 1 January 2024 and 31 December 2024. During this
measurement period the fund had an underweight exposure to the underperforming SA equity
market (relative to global equity), which assisted returns. The fund also held US managed
volatility exposure at certain periods throughout the year, which has added good value; in addition

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