Efficient group

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Efficient group

  1. 1. A division of Efficient Group SENATE GROUP PRESENTATION 25 March 2011
  2. 2. AGENDA 1. The Efficient Group (EF Group) 2. Efficient Select (EF Select) 3. Single Manager Boutique 4. Multi Manager Boutique 5. Private Client Boutique 6. Questions
  3. 3. EF GROUP • The EF Group is a diversified financial services business that provides a wide range of professional services and products • EF Group was born from the merger of a number of financial entities in September 2007 • The company was successfully listed on the Johannesburg Stock Exchange on 20 April 2009
  4. 4. KEY PLAYERS Steve Booysen – Chairman Heiko Weidhase - Chief Executive Officer Dawie Roodt – Chief Economist
  5. 5. ORGANOGRAM EF GROUP EF ADVISE EF TRANSACT EF ACCESS EF CAPITAL EF SELECT
  6. 6. FORWARD PHILOSOPHY FORWARD
  7. 7. ROLE PLAYERS Harold Hopking – Managing Director Founding member of the EF Group, with over 20 years investment experience Brendan Vadas – Chief Investment Officer Is a CFA Charter Holder, Airline Transport Pilot and US Commercial flight Instructor Our team consists of 10 investment professionals
  8. 8. ACHIEVEMENTS • Standard and Poor’s Award in 2005 • Raging Bull certificate in 2006 • 2 Micropal Award in 2008
  9. 9. FUNDS UNDER MANAGEMENT Single Manager: R 750 million Multli-Manager: R 1 500 million Private Clients: R 300 million Outsourced: R 450 million Total FUM: R 3 billion
  10. 10. A division of Efficient Group EFFICIENT SELECT SINGLE MANAGER BOUTIQUE
  11. 11. PEOPLE Jean-Pierre du Plessis. Head of Single Managers B.Business Science (Finance) (UCT) Rob Enslin. Dealer, Assistant fund manager B.Comm Hons (Financial Analysis) (Stellenbosch) CFA level 2 candidate Stuart Sinclair. Analyst, Assistant fund manager B.Comm Hons (Inv man. & Ecos) (Stellenbosch) Enrolled in the CIMA programme Marius Van Wyk. Analyst, Assistant fund manager B.Eng (Electric & Electronic) (Stellenbosch) MSC.Eng Cum Laude (Stellenbosch) Passed CFA level 2 Ryan McCaughey Intern B Com Financial Analysis (Honours)
  12. 12. FORWARD PHILOSOPHY Earnings GrowthRate ForwardPE FORWARD Philosophy: Growth at a Reasonable Price Value Stocks Growth Stocks
  13. 13. INVESTMENT PROCESS FORWARD PHILOSOPHY IDEAS ANALYSIS PRESENTATION AND DISCUSSION EXECUTION MONITORING RISK ASSESMENT
  14. 14. FORWARD ANALYSIS How we apply the FORWARD Investment Philosophy to analyzing stocks: F Fundamentals O Opportunities R Risks W Wealth creation A Assets R Reliability of Management D Dividends
  15. 15. THE 6 CATEGORIES OF STOCKS A unique but logical approach to how we view all listed shares: 1. Fast growers 2. Slow Growers 3. Stalwarts 4. Asset Plays 5. Cyclicals 6. Turnarounds * Inspired by Peter Lynch
  16. 16. RISK MANAGEMENT
  17. 17. A division of Efficient Group EFFICIENT SELECT SINGLE MANAGER FUNDS
  18. 18. EFFICIENT EQUITY FUND • Category: General Equity • Benchmark:J203T • Fund Size: R240m • The focus of this fund is to provide the investor with above average capital growth by being fully invested in SA equities at all times • We aim to do this by applying our FORWARD investment philosophy to South African equities and property companies • The portfolio is managed in a benchmark agnostic manner
  19. 19. EFFICIENT EQUITY FUND TOP 10 HOLDINGS 1. BHPBilliton 2. Clicks 3. Pinnacle 4. Famous Brands 5. Steinhoff 6. Old Mutual 7. Woolworths 8. ABSA 9. ABIL 10. Discovery
  20. 20. EFFICIENT EQUITY FUND 41% 29% 26% 4% STOCK CATEGORIES Cyclical Stalwart Fast Grower Slow Grower STYLES % VALUE STOCKS 57.69% GROWTH STOCKS 38.46% DIVIDEND YIELD 3.85% OPPORTUNITES 0.00% TOTAL NUMBER OF STOCKS 32 MARKET CAP % LARGE CAP 52.24% MID CAP 20.60% SMALL CAP 27.16% AVERAGE MARKET CAP (BN) R 52.35 CRISIS TRADES NAME SHARES % OF FUND BIL 863 586 2.5% MTN 128 594 2.0% SOL 127 979 2.0% ASA 144 264 1.5% OML 63 243 2.0% TOTAL 10.0%
  21. 21. EFFICIENT PROPERTY FUND • Category: Real Estate • Benchmark:J253T • Fund Size: R200m • The focus of this fund is to provide the investor with income as well capital growth • We aim to do this by applying our FORWARD investment philosophy to South African property companies • The portfolio is managed in a benchmark agnostic manner
  22. 22. TOP 10 HOLDINGS 1. Growthpoint 2. Hyprop 3. Resilient 4. Acucap 5. Unibail Rodamco 6. Pangbourne 7. Redefine 8. Capital 9. Hospitality A 10. SA Corporate 7% 50% 18% 19% 6% 0% SECTOR ALLOCATION Cash Retail Office Industrial Hotels Residential EFFICIENT PROPERTY FUND
  23. 23. EFFICIENT ACTIVE ALLOCATION FUND • Category: Worldwide Flexible • Benchmark: CPI+4 • Fund Size: R180m • The focus of this fund is to provide the investor with long term capital growth through global diversification • The focus of this fund is to provide South African investors with a vehicle for global equity exposure and diversification • The fund aims to have at least 50% of it’s assets offshore at any one time • The management of this fund consists of 2 parts – domestic and offshore. Our FORWARD philosophy is utilised in selecting both SA equities and global companies
  24. 24. EFFICIENT ACTIVE ALLOCATION FUND TOP 10 HOLDINGS: 1. Templeton Asian Growth 2. Templeton Latin America 3. Templeton Eastern Europe 4. Swatch 5. Unibail Rodamco 6. Yum Brands 7. New Gold 8. Monsanto 9. Hyundai 10. GlaxoSmithKline 35% 18% 14% 10% 9% 8% 6% COUNTRY ALLOCATION SOUTH AFRICA USA UK EUROPE ASIA EX JAPAN AUSTRALIA LATIN AMERICA DELVOPED VS DEVELOPING % DEVELOPED 47.91% DEVELOPING 52.09%
  25. 25. EFFICIENT PRUDENTIAL FUND • Category: Prudential Variable • Benchmark: 65% ALSI, 35% Cash • Fund Size: R105m • The focus of this fund is to provide the investor with capital growth within the risk parameters associated with retirement funding investments • The fund achieves this objective through the use of derivatives, a minimum cash holding and stock picking
  26. 26. EFFICIENT PRUDENTIAL FUND TOP 10 HOLDINGS • Efficient Property • Efficient Active Allocation • Clicks • Pinnacle • Steinhoff • Lewis • Old Mutual • Famous Brands • Discovery • ABIL SCENARIO ANALYSIS % Ret (P) % Ret (B) % Ret +/- Euro Weakens (Sovereign Debt Crisis) -0.92 -4.23 3.31 9/11 Event (Terrorist Attack) -2.65 -5.92 3.27 Dotcom Bubble Bursts (Market Bubble) 2.29 4.4 -2.11 Invasion of Iraq (Major War) -3.05 -5.59 2.54 Flight to Quality (Flight to Dev Mkts) -2.98 -4.54 1.56 Economic Recovery Falters (Double-dip) -4.02 -5.77 1.75 US in Recession (Growth Concerns) -3.3 -5.18 1.88 Interest Rates up 100bps (Inflation Rises) 0.02 0 0.02
  27. 27. EFFICIENT MONEY MARKET FUND • Category: Money Market • Benchmark: 3 Month Jibar • Fund Size: R73m • The focus of this fund is to provide the investor with cash beating returns over time while ensuring capital preservation
  28. 28. RANKINGS FUND 6 MONTHS 1 YEAR Rank No. of funds Rank No. of funds EFFICIENT EQUITY FUND 22 85 55 85 EFFICIENT ACTIVE ALLOCATION FUND 2 16 1 15 EFFICIENT PROPERTY FUND 6 22 6 21 EFFICIENT PRUDENTIAL FUND 13 63 13 58
  29. 29. MARKET OUTLOOK • Japanese recession concerns; Euro area uncertainty and global political instability will add to market volatility • US recovery on track • Emerging markets will continue to drive global growth and consumption • Market Volatility will continue providing us with great opportunities to buy our favourite stocks at discounted prices
  30. 30. A division of Efficient Group EFFICIENT SELECT MULTI MANAGER BOUTIQUE
  31. 31. Manager Diversification Reduced Asset Correlation MULTI MANAGER PHILOSOPHY Reduced Portfolio Risk
  32. 32. INVESTMENT PROCESS (A) Daily Investment Meeting Quarterly Houseview Asset Class Ranges Market Watch Idea Generation Daily See-Through Asset Alloc Monitoring Quarterly Houseview Meeting Strategic Asset Class Ranges Tactical Asset Allocation
  33. 33. Q1-2011 HOUSEVIEW NEGATIVE CAUTIOUS NEUTRAL OPTMISTIC POSITIVE LOCAL CASH (-) Relatively better value in Property and Equity (+) SA yields still more attractive than DM’s LOCAL BONDS (-) Inflation has bottomed (+) Rate hikes expected only in H2 (not Q1 or Q2) LOCAL PROPERTY (-) May have peaked (+) Vacancies decreasing (+) Positive GDP growth expected LOCAL EQUITY (+) “BRICS” invite emphasises Gateway to Africa; (+) Commodities up-cycle under way OFFSHORE CASH (-) Zero Rates OFFSHORE BONDS (-) Inflation concerns OFFSHORE PROPERTY (+) Attractive valuations OFFSHORE EQUITY (+) Attractive valuations
  34. 34. STRATEGIC RANGES 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95 100 Efficient Inflation + 2 FoF Efficient Inflation + 4 FoF Efficient Inflation + 6 FoF 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95 100 Efficient Inflation + 2 FoF Efficient Inflation + 4 FoF Efficient Inflation + 6 FoF EQUITY CASH + FIXED INTEREST
  35. 35. CURRENT ASSET ALLOC 72% 18% 10% EFFICIENT INFLATION + 6 FoF EQUITY PROPERTY CASH and BONDS 66% 16% 17% EFFICIENT INFLATION + 4 FoF EQUITY PROPERTY CASH and BONDS 41% 17% 42% EFFICIENT INFLATION + 2 FoF EQUITY PROPERTY CASH and BONDS
  36. 36. INVESTMENT PROCESS (B) EQUITY Manager Universe Absa Cadiz Efficient Old Mutual Fund Universe Asset Allocation General Equity Sector Tilts PROPERTY Manager Universe Efficient Stanlib Fund Universe Listed Property FIXED INTEREST Manager Universe Prudential RMB SIM Fund Universe Varied Specialist Qualitative Manager Assessment: Bi-Annual Due Diligence and Scoring Process Quantitative Fund Analysis: Morningstar Portfolio Construction: Correlation
  37. 37. UNDERLYING FUNDS  OLD MUTUAL MINING & RES R………………………………….257.22  ABSA SELECT EQUITY…………………………………………………194.12  EFFICIENT EQUITY……………………………………………………..149.61  EFFICIENT PROPERTY…………………………………………………143.08  FTSE/JSE ALL SHARE PR ZAR………………………………………122.21  RMB INCOME PLUS A………………………………………………..81.43 CUMULATIVE RETURN GROWTH OVER 6 YEARS TO 23 MARCH 2011
  38. 38. A division of Efficient Group EFFICIENT INTERNATIONAL FoF
  39. 39. ASSET + FUND ALLOCATION EFFICIENT INTERNATIONAL FOF (USD) 28 FEBRUARY 2011 79% 9% 7% 4%1% ASSET ALLOCATION Equity Real Estate Fixed Interest Gold Cash 0.00% 5.00% 10.00% 15.00% Cash 1% SPDR Gold Exchange Traded Fund 4% ACPI Global Credit Fund 2% Fidelity Emerging Market Debt Fund 5% VAM-Funds International Real Estate Fund 9% Templeton Latin America Fund 3% Franklin Mid-East North Africa Fund 5% Franklin Technology Fund 6% Fidelity Global Technology Fund 7% Orbis Asia ex Japan Fund 7% Templeton Brazil Russia India China Fund 8% Fidelity Australia Fund 9% Fidelity China Focus Fund 11% VAM-Funds US Microcap Growth Fund 11% Templeton Emerging Markets Small Cap Fund 12% FUND ALLOCATION
  40. 40. REGIONAL ALLOCATION EFFICIENT INTERNATIONAL FOF (USD) 28 FEBRUARY 2011 38% 62% REGIONAL OVERVIEW Developed Markets Emerging Markets 0.00% 10.00% 20.00% 30.00% 40.00% UNSPECIFIED 4% MID-EAST & AFRICA 6% AUSTRALIA 9% LATIN AMERICA 10% ASIA ex JAPAN & CHINA 10% CHINA 23% JAPAN 3% EUROPE 5% US & CANADA 30% REGIONAL BREAKDOWN
  41. 41. PERFORMANCE (USD) OMGB EFFICIENT INTERNATIONAL FOF (USD) 28 FEBRUARY 2011 $5 000.00 $7 000.00 $9 000.00 $11 000.00 $13 000.00 $15 000.00 $17 000.00 20 SEP 2005 (INCEPTION) - 28 FEB 2011 PERFORMANCE IN BASE CURRENCY (USD) OMGB Efficient International FoF : +29% MSCI World Index : 10% High Water Mark USD 3M LIBOR
  42. 42. PERFORMANCE (ZAR) OMGB EFFICIENT INTERNATIONAL FOF (USD) 28 FEBRUARY 2011 R9 000.00 R10 000.00 R11 000.00 R12 000.00 R13 000.00 R14 000.00 R15 000.00 R16 000.00 R17 000.00 R18 000.00 R19 000.00 20 SEP 2005 (INCEPTION) - 28 FEB 2011 PERFORMANCE IN LOCAL CURRENCY (ZAR) OMGB Efficient International FoF : +68% MSCI World Index : +24%
  43. 43. RANKINGS OMGB EFFICIENT INTERNATIONAL FOF (USD) 28 FEBRUARY 2011 GIFS* Rankings to 28 Feb 2011 5 YEARS 4 YEARS 3 YEARS 2 YEARS 1 YEAR USD Aggressive Allocation Return Rank Return Rank Return Rank Return Rank Return Rank Fidelity RMT-Balanced 40.67 1 23.20 2 6.68 8 66.83 13 14.36 28 SCB MPF Ad-Fidelity GIF Bal 39.56 2 22.23 4 5.97 9 66.02 15 14.07 30 Sun Life First State MPF Progrs Gr A 39.26 3 22.42 3 7.37 7 63.79 19 15.66 14 OMGB Efficient International USD 38.31 4 24.98 1 20.15 2 39.74 54 12.36 48 Principal 600 Glbl Growth 36.08 5 15.51 6 1.57 17 64.30 16 17.29 10 Principal 800 Glbl Growth 36.05 6 15.61 5 1.64 16 64.30 17 17.30 9 Principal 500 Balanced Growth A 31.80 7 11.77 16 -0.91 29 61.68 25 16.06 13 SCB MPF Ad-Schroder Bal Inv 31.67 8 15.31 7 4.98 10 61.39 26 14.89 19 SCB MPF-Balanced 31.49 9 13.76 9 2.20 15 53.93 39 14.78 21 Invesco MPF Balanced A 31.28 10 12.24 13 1.56 18 50.09 47 12.40 47 SCB MPF Ad-Balanced 31.18 11 13.75 10 2.28 14 53.63 40 14.67 22 ING MPF MT Basic Bal Growth 31.02 12 13.09 11 4.35 11 57.34 33 13.86 33 Schroder MPF Balanced Invmt - A 30.43 13 13.91 8 3.66 13 61.91 24 14.50 26 ING MPF MT Comp Bal Growth 30.17 14 12.52 12 3.92 12 56.96 35 13.62 37 Bank Consortium E70 Mixed Asset 29.68 15 11.34 17 0.29 21 55.23 38 14.57 24 RCM Balanced A 29.30 16 12.15 14 -0.68 28 52.72 43 14.79 20 BEA (IS) Growth 28.94 17 10.91 19 1.30 19 58.87 29 13.20 40 SCB MPF Ad-RCM Bal 28.06 18 11.29 18 -1.24 30 52.01 44 14.50 25 SCB MPF Ad Invesco Glbl Bal 26.37 19 9.30 21 -0.15 26 48.22 48 11.53 51 BEA (MPF) Growth 26.11 20 8.95 22 0.16 24 57.41 32 12.72 45 Number of investments ranked 45 50 53 65 68 Peer Group Average 19.34 4.34 -0.53 56.70 12.43 *GIFS = Global Investment Fund Sector
  44. 44. A division of Efficient Group EFFICIENT PRIVATE CLIENT BOUTIQUE
  45. 45. QUESTIONS?
  46. 46. THANK YOU
  47. 47. Contact us on : 012 460 9580 (Pretoria) 021 410 6000 (Cape Town) www.efselect.co.za All information used in this presentation and any material referred to herein is subject to copyright and may not be reproduced or used (other than for information purposes) in any way, unless prior written permission has been granted by Efficient Select (Pty) Ltd or the appropriate copyright owner. This presentation is intended for information purposes only and none of the information contained in this presentation constitutes investment advice or a recommendation, solicitation or offer by Efficient Select (Pty) Ltd to buy or sell any financial product. The information contained in this presentation has been prepared without consideration of the investment objectives, financial situation or particular needs of any particular recipient. Any transactions described in this presentation may give rise to substantial risk, including the possible loss of principal value, and are not necessarily suitable for all investors. This presentation should accordingly not be considered as a substitute for the exercise of your own judgment or for obtaining independent advice based on your personal preferences and circumstances. Although all precautions have been made to ensure reliability of data and information contained in this presentation, Efficient Select (Pty) Ltd cannot guarantee the reliability or accuracy thereof. Past performance referred to in this presentation is not necessarily indicative of future performance. Similarly, forecasts contained in this presentation involve risks and uncertainties which may result in future performance, outcomes and results which differ materially from such forecasts. You are accordingly cautioned not to place undue reliance on any historical data, general information or forecasts used in this presentation. Efficient Select (Pty) Ltd accepts no liability whatsoever for any loss, damage (direct or consequential) or expense suffered by a recipient as a result of undue reliance placed on any information contained in this presentation. Authorised Financial Services Provider • FSP No: 859

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