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PSG Angles and Perspectives: Q3 2018

29 October 2018

PSG Angles and Perspectives: Q3 2018

The quarterly publication of PSG Asset Management which contains regular communications from our fund managers and about our funds.

In this edition, we delve deeper into ‘the PSG Asset Management way’ when it comes to investing in fixed income markets. We also consider the attractive opportunities South African fixed income assets and mid-cap ‘SA Inc.’ shares present. Finally, we illustrate how we stress-test positive assessments to make sure the odds remain in our clients’ favour.

Introduction

We apply our process consistently across all asset classes
It’s what we think of as ‘the PSG Asset Management way’: long-term thinking, conducting our own thorough research and investing prudently by never overpaying for a security. This often means that we invest in unpopular parts of the markets, where negative sentiment is more likely to result in the mispricing of attractive individual opportunities. ... Read more

Our fixed income process: patience, prudence and conviction

We recognise our role as stewards of our clients’ capital
When investing in fixed income, we appreciate that the average investor’s risk appetite is fairly conservative. We therefore take a similarly conservative approach. Our emphasis is on minimising mistakes, so our clients don’t lose money. ... Read more

The opportunity in SA Inc.

The best investment returns are born in times of fear and uncertainty
Many of the fears about South Africa’s economic woes appear to be priced in to the shares of businesses exposed to South African GDP (the so-called ‘SA Inc.’ shares). In fact, the valuation of the FTSE/JSE Mid Cap Index, based on its price-to-book ratio, is at historic lows last seen in 2002. We believe that this presents an attractive opportunity. ... Read more

South African government bonds: stress-testing our positive view

South African government bonds are out of favour and providing attractive yields
The long end of the South African government bond curve is currently offering compelling real (after-inflation) yields, driven higher by elevated fears about emerging market assets. In fact, 20-year bonds are yielding over 10%. Expected returns on these instruments are favourable, but to test this thesis we also consider risks to our positive outlook. ... Read more

The PSG Diversified Income Fund: a flexible mandate to preserve capital while maximising income

The Fund aims to preserve capital while providing an attractive income
To achieve this, it invests in a mix of assets (both local and foreign), including fixed income securities, property, bonds and shares. This mix is optimised so that the fund is best positioned to achieve its return objective of inflation +1% over the medium term. ... Read more

Portfolio Holdings as at 30 September 2018

  • Click here to view the portfolio holdings of the funds as at 30 September 2018

Performance to 30 September 2018

  • Click here to view the performance of the funds to 30 September 2018

Unit trust summary

  • Click here to view the unit trust summary of the funds as at 30 September 2018

PSG Angles and Perspectives: Q3 2018 (pdf)

  • Click here to view the full document in PDF

Archive of previous editions

  • Click here to view previous editions

Recommended Articles

Introduction Q3 2018

Our fixed income process: patience, prudence and conviction

The opportunity in SA Inc.

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