Page 180 - Profile's Unit Trusts & Collective Investments - September 2025

Chapter 9 Fund manager interviews

than being managed to the maximum.
Geographic tilt informed by an internally developed USD/ZAR Purchasing Power Parity (PPP)
model:
* Overvalued ZAR: Higher global allocation.
* Undervalued ZAR: Maintain local bias.
„ Asset Classes:
Predominantly equities, with cash maintained below 1% of NAV.
In risk-off regimes, exposure may shift into Gold miners, Gold ETFs and broad-based equity
exposure ETFs.
„ Systematic Selection Framework:
Momentum signals across lookback periods from 3 to 12 months.
Stocks appearing across multiple periods receive higher weights.
Regime filter determines whether allocations are tilted to momentum (risk-on) or defensive
strategies (risk-off).
Comment on your investment year (July 2024 – June 2025) from a fund manager’s point of view
„ Local Equity Universe
The fund remains actively traded and benchmark-agnostic, with positioning determined solely by
price momentum. Over the past year, top holdings in the portfolio shifted meaningfully. In mid-to-late
2024, the fund was overweight SA Inc counters, but this positioning detracted from performance in
Q1 2025 as SA Inc shares lost favour.
At the same time, gold miners began to strengthen, and the Fund initially lagged as it was
underweight gold going into the rally. Through our systematic process, allocations shifted away
from SA Inc exposure and rotated into PGM counters, which by end Q2 2025 dominated the top 10
holdings.
„ Global Equity Universe
Globally, the fund’s top holdings have been concentrated in the technology and energy sectors.
While some experienced significant drawdowns during Q1 2025, most subsequently rebounded to
new all-time highs. The fund’s current positioning is very much aligned with the ongoing AI-driven
growth theme, alongside energy and hardware stocks that underpin this structural trend.
From a fund manager’s perspective, the past year highlights our process’s adaptive, reactive
nature. The fund systematically rotated out of sectors losing momentum and into those gaining
strength, ensuring exposure remains aligned with prevailing market trends both locally and globally.

In terms of risk management, what methods or strategies are you able to use to protect your
clients’ investments?
We employ a systematic, multi-layered risk management framework designed to protect client
investments while preserving the integrity of our momentum-based process. Key methods include:
„ Momentum-Driven Risk Control
By design, our momentum strategy cuts losing shares early and holds onto winners longer.
This naturally mitigates exposure to “value traps” and reduces the risk of permanent capital loss
(e.g., avoiding collapses like Steinhoff, African Bank, Tongaat-Hulett, and Transaction Capital).
„ Regime Filter Overlay
A dynamic risk-on / risk-off filter adjusts allocations based on market conditions.
In risk-off environments, exposure shifts away from concentrated equities and into broad market
and gold exposure
This reduces the drawdowns in trendless or down-trending markets.

178 Profile’s Unit Trusts & Collective Investments September 2025