Page 184 - Profile's Unit Trusts & Collective Investments - September 2025

Chapter 9 Fund manager interviews

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?
We do not attempt to forecast market or fund returns over one-year periods. We continue to find a
wide disparity in valuations across different geographies and sectors, and whilst we are not overly
excited about the risk and return prospects of equity markets in aggregate, we do find it possible
to buy assets at attractive valuations that gives us confidence in the longer term returns the fund
should deliver to investors.

Are equity markets in general overpriced? Do you anticipate a significant correction?
In aggregate, we consider the world equity market to be on the expensive side of fair value. But
this is mainly due to the US market which dominates global indices. Emerging markets and some
non-US developed markets appear to offer attractive value though.
The level of the US market relative to longer term measures of value suggests that future returns
are likely to be lower than that seen over the past decade. However, we have no view as to the
likelihood of a short term correction.
Which asset classes do you expect will give the best total rates of return over the next
few years?
Global equities – but given valuations currently, we expect divergent outcomes between different
geographies within global equities.

Offshore investments are heavily influenced by the rand. Give your view on the rand over the
next 1, 3 and 5 years.
As with markets in general, we do not attempt to make short term forecasts of exchange rates. On
a longer term view, with reference to purchasing power parity, we continue to view the rand as priced
too cheaply, and hence expect rand cash investments (i.e., including interest) to be a better store of
value than many other currencies (notably the US dollar).
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Steyn Capital Equity Prescient Fund

Sector: South African–Equity–SA General
Portfolio manager: André Steyn
Benchmark: FTSE/JSE Shareholder Weighted Total Return Index net of fees

Returns to investors 1 year 3 years
Steyn Capital Equity Prescient Fund 25.92% 18.36%
Sector Average 21.43% 14.07%
Inflation (CPI) 3.02% 4.49%
ProfileData performance stats to 30 June 2025: CAGR with dividends reinvested

Describe your investment universe
Steyn Capital Management has a 16-year track record of successfully investing in equities across
inefficient markets, including South Africa, the rest of Africa, and global Frontier and Emerging
Markets, both on the long and short sides. Over that time-frame, we have whittled down the universe
of 40 000 listed equites across these markets into a proprietary, high-quality universe of 4 500
businesses in Emerging and Frontier markets. We screen that proprietary universe for undervalued
stocks across our markets, with our South African equity unit trust generally being able to invest in
the 150 largest locally listed equities.

Comment on your investment year (July 2024 – June 2025) from a fund manager’s point of view
We’ve had a pleasing 12-month period to June 2025, driven by our SA Inc positioning which
drove performance after the elections. We harvested much of the SA Inc exposure in the post GNU
rally, and reinvested the proceeds in stocks with Emerging Markets exposure, like Naspers, Prosus

182 Profile’s Unit Trusts & Collective Investments September 2025