The quarterly publication of PSG Asset Management which contains regular communications from our fund managers and about our funds.
In this publication we communicate to our investors those thoughts and ideas we believe are important and valuable.
There are times in investment markets when investing appears easy
When equity markets have risen for several years in a row, it can be tempting for some investors to see investing as a game. One in which a clever investor buys something in the hope of selling this (at a higher price) to another clever investor in future. During a period of generationally low global interest rates, and with US equity markets having risen for eight consecutive years, one could begin to think that investing is easy - and without risk. ....
What it means to be stewards of investors' capital
We extend our role of stewardship to the management of companies when we invest
The role of stewardship extends to the management teams of the companies we invest in. When we buy a share on a stock exchange, we are effectively giving our clients' capital to the company's management team. They become stewards of our clients' capital in a broad partnership. When viewed in this regard, it becomes essential to ensure that we hold them to account for how they manage their businesses and in turn our clients' capital.
How we get the odds in our favour to deliver superior long-term returns
We apply our investment process and philosophy consistently
At PSG Asset Management, we have been investing directly in global equities since 2006.
We have a team of 16 investment professionals who analyses both local and global investment opportunities and who adheres to a simple yet structured and disciplined investment process and philosophy. We look for contrarian long-term investment opportunities that satisfy our 3Ms (Moat, Management and Margin of safety) criteria for investment. The process and philosophy applied to global investing is identical to that used in our local funds.
What is cash and why do we hold so much of it?
As our clients are aware, our asset allocation funds currently hold very large amounts of cash – sufficiently large to justify a thorough explanation.
Understanding the nature of cash
In the context of unit trusts, cash is a broad term referring to a large group of yielding instruments that provide short-term liquidity and have a maturity of 12 months or shorter. In Graph 1 we have plotted all the various types of instruments that could be regarded as cash. This graph does not refer to specific instruments but is a generic portrayal of the relative yields you can expect from the different instruments....
Why is liquidity important ?
Liquidity is currently a key theme of the global economy
Liquidity in the instruments that we hold in our funds is always an important consideration, but recently it has really become top of mind. We can all recall how many investors were trapped in illiquid assets in 2008/2009 and avoiding that pitfall is one of our roles as stewards of our clients' investments.
Our equity funds - how they deliver superb long-term returns
Our equity funds are designed and managed to give our investors exceptional long-term outperformance of inflation through exposure to the best local and foreign companies that we can find. We have a team-based approach to researching companies and unearthing opportunities that meet our rigorous investment criteria. We also do not limit ourselves to companies listed in South Africa.....
Portfolio Holdings as at 30 June 2015
Performance to 30 June 2015
Unit trust summary
PSG Angles and Perspectives: Q2 2015 (pdf)
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