24
November 2022
Slower rate hikes possible, Fed minutes show
Adriaan Pask, Chief Investment Officer
PSG Wealth
Market commentary
Wall Street rose after meeting minutes from the US Federal Reserve showed that policymakers believed slower interest rate cuts could be more plausible going forward. “The November meeting minutes also showed that policymakers were growing concerned about the economy's health. Meanwhile, since that meeting, markets have parsed a slew of economic data that somehow reinforced the view of a 50 bps hike in December. US business activity contracted for a fifth straight month in November, with a measure for manufacturing dipping below the 50-point mark for the first time since 2020. At the same time, weekly jobless claims rose more than expected to a three-month high,” Trading Economics noted.
The local and European markets closed in the green before the release of the Fed minutes last night at 21h00. Better-than-expected PMI data out of Europe showing that economic woes on the continent were easing slightly helped major European markets close in the green. The local bourse closed shy of 1% supported by tech and resource counters. While a weaker US dollar and expectations of aggressive interest rate hikes by the South African Reserve Bank boosted the rand, which traded at R16.98/$ at 21h30.
“Growing speculation that China may soon end the regulatory crackdown on the technology sector” boosted Asian markets on Wednesday, with Japan’s Nikkei rising by 0.61%, Hong Kong Heng Seng by 0.68% and China’s Shanghai Index by 0.26%.
Tight global supplies of oil and worries about demand from the second largest economy in the world caused the price of Brent crude to fall somewhat on Wednesday, while gold firmed on a softer greenback.
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Market indicators
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| Date | Index | Current Level | 1 Day Move | 1 Month Move | 6 Month Move | 1 Year Move |
|---|---|---|---|---|---|---|
| 2024-09-18 | ALSI | 83032.71 | 1.25 | 0.80 | 16.34 | 15.51 |
| 2024-09-18 | Basic minerals | 40850.38 | 1.39 | -4.14 | 3.94 | -3.53 |
| 2024-09-18 | Fin + Ind 30 | 11322.53 | 1.22 | 2.18 | 19.96 | 22.55 |
| 2024-09-18 | Financial | 51002.70 | 1.26 | 3.96 | 30.05 | 34.99 |
| 2024-09-18 | Industrial index | 120020.19 | 1.18 | 0.26 | 13.25 | 13.03 |
Some data may be delayed, the above table reflects the latest information available from Morningstar.
Please note performance reported during the first week of each month may be impacted by distributions. Distributions are fully accounted for by the second week of each month.
Collective investment schemes
Local funds
| ASISA category | Fund name | NAV (Rands) at 18 Sep 2024 | Performance –As at 2024/08/31 | |||
|---|---|---|---|---|---|---|
| 1 year % | 3 year % | 5 year % | Inception % | |||
| South Africa - Equity - General | PSG Equity Fund Class A | 17.19 | 13.29 | 16.72 | 14.90 | 12.97 |
| PSG Equity Fund Class A | 17.19 | 13.29 | 16.72 | 14.90 | 12.97 | |
| PSG Equity Fund Class E | 17.21 | 12.18 | 15.90 | 14.79 | 9.30 | |
| PSG Equity Fund Class F | 17.24 | 13.82 | 17.26 | 15.42 | 10.29 | |
| PSG Investment Management Opportunity Equity Fund of Funds Class D | 1.14 | — | — | — | — | |
| PSG SA Equity Class F | 1.73 | 19.75 | 17.45 | 15.63 | 8.30 | |
| PSG Wealth Creator Fund of Funds Class D | 54.96 | 14.10 | 10.91 | 13.32 | 12.17 | |
| South Africa - Multi Asset - Flexible | PSG Flexible Fund Class A | 8.23 | 11.36 | 15.22 | 13.53 | 11.38 |
| PSG Flexible Fund Class A | 8.23 | 11.36 | 15.22 | 13.53 | 11.38 | |
| PSG Flexible Fund Class E | 8.23 | 11.65 | 15.53 | 13.83 | 10.45 | |
| South Africa - Multi Asset - High Equity | PSG Balanced Fund Class A | 101.06 | 13.02 | 14.51 | 13.98 | 12.88 |
| PSG Balanced Fund Class A | 101.06 | 13.02 | 14.51 | 13.98 | 12.88 | |
| PSG Balanced Fund Class E | 101.10 | 13.67 | 15.18 | 14.63 | 10.14 | |
| PSG Wealth Moderate Fund of Funds Class D | 42.36 | 11.93 | 9.92 | 10.70 | 10.83 | |
| South Africa - Multi Asset - Low Equity | PSG Stable Fund Class A | 1.70 | 10.91 | 10.32 | 9.78 | 8.60 |
| PSG Stable Fund Class A | 1.70 | 10.91 | 10.32 | 9.78 | 8.60 | |
| PSG Stable Fund Class E | 1.70 | 11.55 | 10.95 | 10.41 | 8.42 | |
| PSG Wealth Preserver Fund of Funds Class D | 25.64 | 11.46 | 8.94 | 8.86 | 9.19 | |
| South Africa - Multi Asset - Income | PSG Diversified Income Fund Class A | 1.34 | 11.26 | 8.59 | 8.60 | 8.00 |
| PSG Diversified Income Fund Class A | 1.34 | 11.26 | 8.59 | 8.60 | 8.00 | |
| PSG Diversified Income Fund Class E | 1.34 | 11.98 | 9.23 | 9.19 | 8.56 | |
| PSG Wealth Income Fund of Funds Class D | 12.70 | 10.52 | 8.28 | 7.54 | 7.98 | |
| South Africa - Interest Bearing - Short Term | PSG Income Fund Class A | 1.08 | 9.14 | 7.28 | 7.48 | 7.21 |
| PSG Income Fund Class A | 1.08 | 9.14 | 7.28 | 7.48 | 7.21 | |
| PSG Income Fund Class E | 1.08 | 9.45 | 7.59 | 7.79 | 7.88 | |
| PSG Wealth Enhanced Interest Fund of Funds Class D | 1.02 | 9.15 | 7.29 | 6.59 | 6.80 | |
| South Africa - Interest Bearing - Money Market | PSG Money Market Fund Class A | 1.00 | 8.42 | 6.64 | 5.92 | 7.95 |
| PSG Money Market Fund Class A | 1.00 | 8.42 | 6.64 | 5.92 | 7.95 | |
| PSG Money Market Fund Class F | 1.00 | 8.73 | 6.93 | 6.19 | 5.40 | |
| South African - Multi Asset - Low Equity | PSG Investment Management Cautious Fund of Funds Class D | 1.37 | 12.99 | 10.74 | — | 10.91 |
| PSG Investment Management Cautious Fund of Funds Class D | 1.37 | 12.99 | 10.74 | — | 10.91 | |
| South African - Multi Asset - High Equity | PSG Investment Management Growth Fund of Funds Class D | 1.65 | 16.21 | 13.80 | — | 13.57 |
| PSG Investment Management Growth Fund of Funds Class D | 1.65 | 16.21 | 13.80 | — | 13.57 | |
| South African - Multi Asset - Income | PSG Investment Management Multi-Asset Income Fund of Funds Class D | 1.15 | 10.19 | 8.12 | — | 8.15 |
| PSG Investment Management Multi-Asset Income Fund of Funds Class D | 1.15 | 10.19 | 8.12 | — | 8.15 | |
Performance data on local funds is shown up to the last market close minus 1 day.
Some data may be delayed, the above table reflects the latest information available from Morningstar.
Please note performance reported during the first week of each month may be impacted by distributions. Distributions are fully accounted for by the second week of each month.
Global funds
Through our tried-and tested investment philosophy, we have built competitive global solutions to help clients achieve their investment goals.
The following funds are rand-denominated, but invest internationally:
| ASISA category | Fund name | NAV (Rands) at 18 Sep 2024 | Performance –As at 2024/08/31 | |||
|---|---|---|---|---|---|---|
| 1 year % | 3 year % | 5 year % | Inception % | |||
| Global - Equity - General | PSG Global Equity Feeder Fund Class A | 4.50 | 0.10 | 15.11 | 14.93 | 12.19 |
| PSG Global Equity Feeder Fund Class A | 4.50 | 0.10 | 15.11 | 14.93 | 12.19 | |
| PSG Global Equity Feeder Fund Class E | 4.67 | 0.68 | 15.77 | 15.45 | 11.76 | |
| PSG Wealth Global Creator Feeder Fund Class D | 4.62 | 12.41 | 9.40 | 14.06 | 14.82 | |
| Global - Multi Asset - Flexible | PSG Global Flexible Feeder Fund Class A | 3.50 | 0.05 | 13.06 | 13.94 | 11.89 |
| PSG Global Flexible Feeder Fund Class A | 3.50 | 0.05 | 13.06 | 13.94 | 11.89 | |
| PSG Global Flexible Feeder Fund Class B | 3.69 | 0.63 | 13.71 | 14.40 | 12.39 | |
| PSG Wealth Global Flexible Feeder Fund Class D | 4.79 | 5.76 | 5.27 | 9.30 | 10.75 | |
| PSG Wealth Global Moderate Feeder Fund Class D | 4.95 | 8.23 | 7.88 | 8.81 | 12.16 | |
| Global - Multi Asset - Low Equity | PSG Wealth Global Preserver Feeder Fund Class D | 1.53 | 3.67 | 7.42 | 6.08 | 6.47 |
| PSG Wealth Global Preserver Feeder Fund Class D | 1.53 | 3.67 | 7.42 | 6.08 | 6.47 | |
Performance data on offshore funds is shown up to the last market close minus 2 days.
Some data may be delayed, the above table reflects the latest information available from Morningstar.
Please note performance reported during the first week of each month may be impacted by distributions. Distributions are fully accounted for by the second week of each month.
Invest in other currencies
The following funds invest internationally using foreign currency
| ASISA category | Fund name | NAV (Rands) at 17 Sep 2024 | Performance –As at 2024/08/31 | |||
|---|---|---|---|---|---|---|
| 1 year % | 3 year % | 5 year % | Inception % | |||
| EAA Fund GBP Cautious Allocation | PSG Wealth Global Preserver FoF (GBP) Class D | 2.07 | 6.15 | 1.35 | 1.11 | 4.86 |
| PSG Wealth Global Preserver FoF (GBP) Class D | 2.07 | 6.15 | 1.35 | 1.11 | 4.86 | |
| EAA Fund GBP Flexible Allocation | PSG Wealth Global Flexible FoF (GBP) Class D | 3.81 | 9.00 | 0.51 | 4.80 | 9.17 |
| PSG Wealth Global Flexible FoF (GBP) Class D | 3.81 | 9.00 | 0.51 | 4.80 | 9.17 | |
| EAA Fund Global Flex-Cap Equity | PSG Global Equity Sub-Fund Class A | 2.18 | 6.61 | 7.97 | 11.67 | 5.81 |
| PSG Global Equity Sub-Fund Class A | 2.18 | 6.61 | 7.97 | 11.67 | 5.81 | |
| PSG Global Equity Sub-Fund Class B | 2.26 | 7.16 | 8.58 | 12.29 | 6.91 | |
| EAA Fund Global Large-Cap Blend Equity | PSG Wealth Global Creator Fund of Funds Class D | 3.03 | 19.82 | 2.43 | 10.59 | 9.88 |
| PSG Wealth Global Creator Fund of Funds Class D | 3.03 | 19.82 | 2.43 | 10.59 | 9.88 | |
| EAA Fund USD Cautious Allocation | PSG Wealth Global Preserver FoF (USD) Class D | 1.75 | 9.87 | 0.56 | 2.67 | 3.68 |
| PSG Wealth Global Preserver FoF (USD) Class D | 1.75 | 9.87 | 0.56 | 2.67 | 3.68 | |
| EAA Fund USD Flexible Allocation | PSG Global Flexible Sub-Fund Class A | 18.97 | 6.49 | 6.27 | 10.70 | 5.77 |
| PSG Global Flexible Sub-Fund Class A | 18.97 | 6.49 | 6.27 | 10.70 | 5.77 | |
| PSG Global Flexible Sub-Fund Class B | 20.14 | 6.99 | 6.76 | 11.20 | 6.39 | |
| PSG Investment Management Global Flexible Fund of Funds (Dollar) | 1.64 | 10.43 | -2.90 | 4.01 | 2.77 | |
| PSG Wealth Global Flexible FoF (USD) Class D | 3.21 | 12.23 | -1.43 | 6.02 | 7.94 | |
| EAA Fund USD Moderate Allocation | PSG Wealth Global Moderate Fund of Funds Class D | 2.14 | 14.74 | 1.10 | 5.51 | 5.48 |
| PSG Wealth Global Moderate Fund of Funds Class D | 2.14 | 14.74 | 1.10 | 5.51 | 5.48 | |
Performance data on offshore funds is shown up to the last market close minus 2 days.
Some data may be delayed, the above table reflects the latest information available from Morningstar.
Please note performance reported during the first week of each month may be impacted by distributions. Distributions are fully accounted for by the second week of each month.
Non-Collective investment schemes
House view equity portfolios
| Fund display name | Performance –As at 2024/09/18 | |||
|---|---|---|---|---|
| 1 year % | 3 year % | 5 year % | Inception % | |
| PSG Wealth Income Growth Equity Portfolio | 22.73 | 9.88 | 5.03 | 3.71 |
| PSG Wealth Offshore Equity Portfolio (USD) | 12.73 | 3.58 | 10.15 | 11.47 |
| PSG Wealth SA Equity Portfolio | 13.84 | 8.15 | 5.39 | 4.61 |
| PSG Wealth SA Property Equity Portfolio | 48.89 | 15.05 | 4.31 | -0.07 |
* PSG Wealth equity portfolio performance are shown gross of management fees, but net of brokerage and other trading costs.
The House view portfolios are bespoke solution portfolios and not part of the Collective Investment Schemes’ portfolios.
Recent investment ideas
MTN
- MTN Group Ltd is a South African multinational mobile telecommunications company with its main operations across Africa.
- Results came in ahead of expectations and were driven by strong data from the various operating companies (Opcos).
- The balance sheet remains robust. Group net debt/EBITDA of 0.8x slightly improved against the 30 June 2022 level.
- Cash upstreamed amounted to R2.1 billion from Opcos in 3Q22, which brought the YTD total to R11.5 billion on 30 September 2022.
- While no cash upstreamed from Nigeria during Q3, the group received R1.5 billion cash from MTN Nigeria post the period-end, bringing the YTD total cash upstreamed from Nigeria to R6.0 billion.
- The group's outlook is largely unchanged, MTN Nigeria made a margin commitment that is slightly higher than current levels.
- We maintain our buy recommendation on MTN.
- Please join us on Thursday at 11h30 for our Microsoft Teams Q&A sessions. Click here to join.
Tesla
- Tesla Inc is an international American automotive and clean energy company that designs and manufactures electric vehicles, battery energy storage from home to grid-scale, solar panels and solar roof tiles, and related products and services.
- Tesla reported 3Q22 results, which came in below expectations.
- We have an intrinsic value of $188.5 (a downside of 16%) and have upgraded our recommendation to a hold position.
- It’s derived from an exit price-to-earnings ratio (P/E) of 30x. This appreciates visionary management.
- The P/E is based on comparables. It’s difficult to find a like-for-like comparable for Tesla, given its first-mover advantage and it being disruptive in its space. This poses a risk.
- A high multiple needs to be supported by a high growth rate, which poses a risk due to the competitive space Tesla operates (new entrants coming in).
- Our intrinsic value remains unchanged at $188.5, but accounts for the 1-for-3 stock split.
- There is a negative asymmetry to Tesla’s valuation.
- Please join us on Thursday at 11h30 for our Microsoft Teams Q&A sessions. Click here to join
Alphabet | Microsoft
- Alphabet Inc is an American multinational technology conglomerate holding company.
- On 25 October 2022, Alphabet released its 3Q22 results.
- Shares declined 6% in after-hours trading as the market digested the results, which came in below expectations on the top and bottom lines.
- Our sell recommendation remains unchanged, but we have revised our intrinsic value downwards based on weaker advertising demand and increased advertising competition.
- Microsoft Corporation is an American multinational technology corporation producing computer software, consumer electronics, personal computers, and related services.
- On 25 October 2022, Microsoft released first-quarter results for FY23. Despite beating consensus, shares were 7% lower on weaker guidance provided by management.
- Since our last update, Microsoft shares have declined about 8% and the MSCI World Index approximately 5%.
- We maintain our hold recommendation; however, we’ve adjusted our intrinsic value downwards by 5% to $266 to incorporate management guidance.
- Please join us on Thursday at 11h30 for our Microsoft Teams Q&A sessions. Click here to join.
Economic Calendar
View the Economic Calendar
Corporate Actions
| Date | Company | Share code | Expectation |
|---|---|---|---|
| 30 November 2022 | Datatec Limited | DTC | DVOP |
| 30 November 2022 | Gradn Parade Investments Limited | GPL | Cash Dividend |
| 30 November 2022 | Grindrod Shipping Holdings Limited | GSH | Tender Offer |
| 30 November 2022 | Invicta Holdings Limited Preference Shares | IVTP | Cash Dividend |
| 30 November 2022 | Ninety One Plc | N91 | Cash Dividend |
| 30 November 2022 | Ninety One Limited | NY1 | Cash Dividend |
| 30 November 2022 | Oasis Crescent Property Fund Limited | OAS | DRIP |
| 30 November 2022 | Pan African Resources Plc | PAN | Cash Dividend |
| 30 November 2022 | Pick 'n Pay Stores Limited | PIK | Cash Dividend |
| 30 November 2022 | Raubex Group Limited | RBX | Cash Dividend |
| 30 November 2022 | Stor-Age Property REIT Limited | SSS | Cash Dividend |
| 30 November 2022 | Transaction Capital Limited | TCP | Cash Dividend |
| 30 November 2022 | Tetainer Group Holdings Limited | TXT | Cash Dividend |
The information above is to the best of our knowledge correct.
The Corporate Actions are updated weekly.
Fund performance
Collective Investment Schemes in Securities (CIS) are generally medium-term to long-term investments. The value of participatory interests (units) may go down as well as up and past performance is not a guide to future performance. Collective Investment Schemes are traded at ruling prices and can engage in borrowing and scrip lending. A schedule of fees and charges and maximum commissions is available on request from PSG Collective Investments (RF) Limited. Commission and incentives may be paid, and if so, are included in the overall costs. Forward pricing is used. The Portfolios may be capped at any time in order for them to be managed in accordance with their mandate.
Performance is calculated for the portfolio and individual investor performance may differ as a result thereof. Different classes of participatory interest can apply to these portfolios and are subject to different fees, charges and possibly dividend withholding tax and will thus have differing performances. Annualised performances show longer term performance rescaled over a 12-month period. Individual performance may differ as a result of initial fees, the actual investment date, the date of reinvestment and dividend withholding tax. The portfolio is valued at 15h00 daily. Income distributions are net of any applicable taxes. Investment performance data is for illustrative purposes only. Actual performance figures are available on request. Always refer to the fund fact sheet (Minimum Disclosure Document) for full details, fees and risks of the fund.
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