Southern Charter - The Inconvenient Truth

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The inconvenient truth of Southern Charter Fund of Funds performance since inception.

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Southern Charter - The Inconvenient Truth

  1. 1. The Inconvenient Truth
  2. 2. Asset Allocation Drives Everything Southern Charters fund performance over the last three years vindicatesinvestment research indicating that 92% of performance comes from Asset Allocation, 6% from stock picking, and 2% from market timing Determinants of Performance - Brinson et al Financial Analysts Journal
  3. 3. At Southern Charter we select fundmanagers who have a value investmentstyle bias. An investment style pioneeredby Warren Edward Buffett, considered tobe one of the most successful investors inthe world.
  4. 4. Our Researched - Defensive Fund Manager Selection Equity Fixed Interest Offshore Offshore Property Commodity SA Property
  5. 5. Performance
  6. 6. Multi-Manager UT Fund DiagnosticsSeptember 2011● Bhekinkosi Khuzwayo ● Dieter Hendricks
  7. 7. Explanation of Risk and Performance Tables Measure of stock Absolute selection ability Total Risk incurred Measurement of sensitivity of the Measure of statistical fund to market movements significance of timing reward Alpha Absolute Measures Relative Manager Measures Measures Funds Return Ann. Sharpe Beta Ann. Abnormal Reward Selection for Total Ratio Tracking Return Selection Timing P- Skill Ann. Period Risk (Rank) Error (Rank) (Rank) (Rank) Value (Rank) Aggression Relative total risk incurred Total return for the period Abnormal returns Abnormal returns obtained through asset allocation Unique risk obtained from Return per unit bets incurred through incurring stock of risk taken. stock selection selection bets
  8. 8. AA Prudential High category – Performance Analysis for last 36 Months Summary Performance Analysis of the AA Prudential High Category:Last 36 months (October-2008 to September-2011) Absolute Measures Relative Manager Measures Measures Funds Return Ann. Sharpe Beta Ann. Abnormal Reward Selection for Total Ratio Tracking Return Selection Timing P- Skill Ann. Period Risk (Rank) Error (Rank) (Rank) (Rank) Value (Rank) AggressionSouthern Charter Growth FoF 37.34 9.70 0.12 ( 1) 0.96 2.37 0.24 ( 1) -0.02 ( 8) 0.26 ( 2) 0.05 -0.17 ( 8) 2.20Momentum Accumulator FoF 29.51 11.26 0.06 ( 2) 1.12 2.86 0.08 ( 2) 0.32 ( 1) -0.25 (11) 0.10 2.69 ( 1) 2.48ABSAManaged CPI + 7% FoF A 28.41 9.94 0.06 ( 3) 0.98 2.55 0.06 ( 3) 0.08 ( 5) -0.03 ( 6) 0.86 0.67 ( 6) 2.54Analytics Balanced FoF A 28.38 10.83 0.05 ( 5) 1.09 2.02 0.05 ( 4) -0.04 ( 9) 0.09 ( 5) 0.42 -0.41 ( 9) 1.79AS Forum Aggressive FoF 28.35 10.70 0.05 ( 4) 1.08 1.94 0.05 ( 5) -0.08 (10) 0.13 ( 3) 0.21 -0.97 (10) 1.74APS Managed Growth FoF A 27.76 10.82 0.05 ( 6) 1.08 2.30 0.04 ( 6) 0.08 ( 6) -0.04 ( 7) 0.76 0.73 ( 4) 2.14Average 26.63 10.19 0.04 1.00 2.98 0.02 0.01 0.00 0.36 0.16 2.56VPFP CPI Plus 6 FoF A 25.82 7.88 0.04 ( 7) 0.75 3.66 0.01 ( 7) 0.10 ( 4) -0.09 ( 9) 0.59 0.72 ( 5) 2.75Momentum Aggressive Prudential FoF B1 24.43 9.38 0.02 ( 8) 0.93 2.57 -0.03 ( 8) 0.18 ( 3) -0.21 (10) 0.13 1.59 ( 3) 2.38ABSAPrudential FoF 23.92 7.84 0.02 (10) 0.76 3.44 -0.04 ( 9) -0.15 (11) 0.12 ( 4) 0.42 -1.29 (11) 2.49Dynamic Wealth Creator FoF A 23.91 11.41 0.02 ( 9) 1.13 2.96 -0.05 (10) 0.00 ( 7) -0.05 ( 8) 0.75 0.02 ( 7) 2.66IndequityDynamic FoF 22.27 9.48 0.01 (11) 0.87 4.40 -0.07 (11) -0.61 (12) 0.54 ( 1) 0.02 -3.26 (12) 3.89STANLIB Mod Aggressive FoF A 19.49 12.98 0.00 (12) 1.27 4.70 -0.15 (12) 0.28 ( 2) -0.43 (12) 0.05 1.61 ( 2) 3.68 Source - Cadiz - Multi-Manager fund diagnostic for 3yr period ending 31 September 2011
  9. 9. Summary Performance Analysis of the AA Prudential Medium Category:Last 36 months (October-2008 to September-2011)Performance Analysis for last 36 Months Absolute Measures Relative Manager Measures AA Prudential Medium category – Measures Funds Return Ann. Sharpe Beta Ann. Abnormal Reward Selection for Total Ratio Tracking Return Selection Timing P- Skill Ann. Period Risk (Rank) Error (Rank) (Rank) (Rank) Value (Rank) Aggression InvSolutions MMBalanced FoF 36.79 9.91 0.12 ( 2) 1.23 2.71 0.19 ( 1) 0.11 ( 8) 0.07 ( 9) 0.51 1.19 ( 8) 1.98 Southern Charter Balanced FoF 34.85 8.05 0.12 ( 1) 1.00 1.86 0.16 ( 2) -0.02 (14) 0.18 ( 4) 0.07 -0.25 (14) 1.77 Baroque Moderato FoF 32.66 7.57 0.11 ( 3) 0.94 1.62 0.12 ( 3) -0.03 (15) 0.15 ( 5) 0.09 -0.36 (15) 1.47 FG Saturn Flexible FoF A1 31.64 9.68 0.08 ( 6) 1.21 2.50 0.08 ( 5) 0.24 ( 3) -0.16 (19) 0.13 2.75 ( 2) 1.83 AmityPrudent FoF 30.96 6.97 0.10 ( 4) 0.85 2.32 0.09 ( 4) 0.00 (12) 0.09 ( 8) 0.44 0.05 (12) 1.96 Financial Alliance Infl+5% FoF 30.91 8.83 0.08 ( 7) 1.10 1.87 0.07 ( 6) 0.07 (10) 0.01 (12) 0.96 0.82 (10) 1.70 Select Manager Prudential Active FoF 29.92 8.16 0.08 ( 8) 1.00 2.28 0.06 ( 8) -0.29 (24) 0.35 ( 2) 0.00 -3.05 (24) 2.00 ABSAManaged CPI + 5% FoF A 29.77 6.67 0.09 ( 5) 0.80 2.80 0.07 ( 7) 0.10 ( 9) -0.03 (14) 0.82 0.92 ( 9) 2.28 AS Forum Moderate FoF 29.57 8.67 0.07 ( 9) 1.09 1.67 0.04 ( 9) -0.16 (23) 0.20 ( 3) 0.02 -2.34 (23) 1.41 IndequityBalanced Value FoF 28.23 8.12 0.06 (10) 0.91 3.85 0.03 (10) -0.56 (25) 0.59 ( 1) 0.00 -3.52 (25) 3.31 Momentum Builder FoF 28.13 9.61 0.05 (12) 1.16 3.21 0.01 (12) 0.20 ( 4) -0.19 (21) 0.25 1.45 ( 5) 2.87 ABSAManaged CPI + 6% FoF A 27.41 8.30 0.05 (14) 1.00 2.69 0.00 (13) 0.03 (11) -0.03 (13) 0.86 0.25 (11) 2.69 NFB Balanced FoF A 27.31 7.77 0.05 (13) 0.96 1.98 0.00 (14) 0.17 ( 5) -0.16 (20) 0.14 1.84 ( 3) 1.88 Average 27.21 8.20 0.05 1.00 2.38 0.00 0.00 0.00 0.34 -0.06 2.05 Dynamic Wealth Accumulator FoF A 26.57 9.38 0.04 (16) 1.16 2.45 -0.03 (16) -0.06 (17) 0.03 (11) 0.79 -0.56 (16) 2.11 VPFP CPI Plus 4 FoF A 26.37 5.32 0.06 (11) 0.61 3.79 0.01 (11) 0.15 ( 7) -0.14 (18) 0.27 1.43 ( 6) 2.19 STANLIB MMMed EquityFoF A 26.19 7.42 0.04 (15) 0.93 1.13 -0.02 (15) -0.09 (18) 0.07 (10) 0.19 -2.01 (22) 0.98 Kruger Balanced FoF A 25.70 8.10 0.04 (17) 1.00 1.78 -0.04 (17) -0.12 (20) 0.09 ( 7) 0.38 -1.45 (20) 1.76 STANLIB Moderate FoF A 25.52 9.92 0.03 (18) 1.20 3.51 -0.05 (18) 0.26 ( 2) -0.31 (24) 0.08 1.80 ( 4) 3.00 Analytics Moderate FoF A 24.88 8.70 0.03 (19) 1.09 1.70 -0.06 (20) -0.15 (22) 0.09 ( 6) 0.31 -2.01 (21) 1.54 Four Plus Growth FoF A 24.75 7.80 0.03 (20) 0.96 1.97 -0.05 (19) 0.26 ( 1) -0.32 (25) 0.00 3.25 ( 1) 1.69 Glacier FS Moderate FoF 23.57 8.73 0.02 (21) 1.09 1.79 -0.09 (22) 0.00 (13) -0.09 (17) 0.34 -0.01 (13) 1.62 Platinum Balanced Pru FoF 23.47 7.03 0.01 (22) 0.82 3.05 -0.07 (21) 0.16 ( 6) -0.23 (23) 0.13 1.24 ( 7) 2.63 APS Moderate FoF A 23.24 8.70 0.01 (23) 1.08 1.96 -0.10 (23) -0.05 (16) -0.04 (16) 0.69 -0.59 (17) 1.85 Bastion Moderate FoF A 20.64 8.13 -0.01 (24) 1.01 1.79 -0.15 (24) -0.12 (19) -0.03 (15) 0.75 -1.38 (19) 1.78 Quantum Balanced FoF 11.15 7.37 -0.12 (25) 0.86 3.21 -0.37 (25) -0.14 (21) -0.22 (22) 0.19 -1.01 (18) 2.96 Source - Cadiz - Multi-Manager fund diagnostic for 3yr period ending 31 September 2011
  10. 10. Summary Performance Analysis of the AA Prudential Low Category:Last 36 months (October-2008 to September-2011) Absolute Measures Relative Manager MeasuresPerformance Analysis for last 36 Months Measures Funds Return Ann. Sharpe Beta Ann. Abnormal Reward Selection Source - Cadiz - Multi-Manager fund diagnostic for 3yr period ending 31 September 2011 for Total Ratio Tracking Return Selection Timing P- Skill Ann. Period Risk Error Value Aggression AA Prudential Low category – (Rank) (Rank) (Rank) (Rank) (Rank) Southern Charter Defensive FoF 32.83 4.70 0.16 ( 1) 1.05 2.13 0.18 ( 1) -0.18 (33) 0.36 ( 2) 0.00 -2.09 (32) 1.82 FG Venus Cautious FoF A 32.40 5.34 0.14 ( 3) 1.20 2.45 0.16 ( 2) -0.01 (22) 0.17 ( 8) 0.19 -0.09 (21) 2.27 SMMI Defensive FoF A 31.41 5.22 0.13 ( 4) 1.19 2.23 0.14 ( 3) 0.22 ( 8) -0.08 (26) 0.53 2.19 ( 7) 2.07 Metropolitan OdysseyCons FoF 31.15 4.20 0.15 ( 2) 0.98 1.44 0.14 ( 4) -0.07 (29) 0.22 ( 6) 0.01 -1.21 (30) 1.28 STANLIB Conservative FoF A 29.59 4.85 0.11 ( 8) 1.04 2.48 0.11 ( 5) 0.34 ( 2) -0.23 (38) 0.10 2.94 ( 4) 2.37 NFB Cautious FoF A 29.23 3.96 0.12 ( 5) 0.91 1.53 0.10 ( 6) 0.29 ( 5) -0.18 (37) 0.03 4.32 ( 1) 1.38 GFAStable FoF 28.97 3.90 0.12 ( 7) 0.91 1.46 0.10 ( 8) -0.02 (24) 0.12 (13) 0.13 -0.37 (23) 1.36 VPFP CPI Plus 2 FoF A 28.79 3.69 0.12 ( 6) 0.77 2.19 0.10 ( 7) 0.23 ( 6) -0.13 (33) 0.25 2.46 ( 6) 1.95 ABSAManaged CPI + 3% FoF A 28.60 4.82 0.09 (12) 1.11 1.91 0.08 (10) 0.04 (18) 0.04 (16) 0.70 0.48 (17) 1.85 Third Circle Defensive FoF 28.31 4.47 0.10 (10) 0.92 2.51 0.09 ( 9) -0.26 (40) 0.35 ( 3) 0.01 -2.43 (36) 2.24 STANLIB Mod ConservFoF A 28.06 7.91 0.06 (17) 1.81 4.53 0.06 (13) 0.30 ( 3) -0.24 (39) 0.18 2.05 ( 8) 3.04 Kruger Prudential FoF A 27.79 4.35 0.09 (13) 0.99 1.78 0.07 (11) 0.07 (15) 0.00 (21) 0.98 0.77 (13) 1.78 Momentum Consolidator FoF 27.51 5.79 0.07 (15) 1.36 2.47 0.05 (15) 0.04 (17) 0.01 (19) 0.94 0.48 (18) 1.96 Celtis Conservative FoF A 27.15 4.19 0.08 (14) 1.00 1.22 0.06 (14) -0.11 (31) 0.17 ( 9) 0.01 -2.15 (34) 1.11 Stringfellow Stable FoF 26.92 7.52 0.05 (24) 1.82 3.76 0.03 (19) 0.14 (12) -0.11 (31) 0.27 1.71 (12) 1.74 Dynamic Wealth Preserver FoF A 26.87 6.99 0.05 (23) 1.69 3.26 0.03 (18) 0.05 (16) -0.02 (22) 0.88 0.58 (16) 1.69 AmityConserver FoF 26.80 3.16 0.10 (11) 0.48 3.24 0.07 (12) 0.22 ( 7) -0.16 (36) 0.27 1.90 ( 9) 2.43 ABSAManaged CPI + 4% FoF A 26.58 6.17 0.05 (22) 1.40 3.04 0.03 (17) 0.08 (13) -0.04 (23) 0.78 0.61 (15) 2.61 Financial Alliance Infl+3% FoF 26.55 5.94 0.05 (20) 1.42 2.36 0.03 (20) 0.19 (10) -0.16 (35) 0.08 2.56 ( 5) 1.51 AS Forum Cautious FoF 26.09 4.44 0.06 (18) 1.06 1.35 0.03 (21) -0.19 (34) 0.22 ( 5) 0.00 -3.48 (40) 1.15 STANLIB MMLow EquityFoF A 25.95 4.05 0.06 (16) 1.00 0.55 0.03 (22) 0.00 (21) 0.03 (17) 0.31 -0.16 (22) 0.54 Noble PP Strategic Income FoF A 25.69 2.02 0.10 ( 9) 0.35 2.96 0.04 (16) -0.04 (27) 0.09 (15) 0.26 -0.68 (27) 1.35 4i Stable FoF 25.56 5.10 0.04 (26) 1.20 1.88 0.01 (26) -0.35 (41) 0.37 ( 1) 0.00 -5.72 (42) 1.28 Select Manager Cautious Managed FoF 25.53 3.63 0.06 (19) 0.79 1.99 0.03 (23) -0.20 (36) 0.22 ( 4) 0.02 -2.48 (37) 1.66 Skyblue Kimberlite Cautious FoF 25.26 3.79 0.05 (25) 0.78 2.28 0.02 (25) 0.07 (14) -0.05 (24) 0.67 0.73 (14) 2.09 ABSACautious FoF A 25.14 3.28 0.05 (21) 0.55 3.03 0.03 (24) 0.35 ( 1) -0.33 (42) 0.02 3.25 ( 3) 2.25 Average 25.06 4.57 0.04 1.02 2.27 0.01 0.00 0.00 0.30 -0.14 1.81 Platinum Income Provider FoF 24.49 2.72 0.04 (27) 0.53 2.54 0.01 (27) 0.15 (11) -0.13 (34) 0.16 1.87 (10) 1.61 S-BRO Defensive FoF A 24.42 3.66 0.03 (28) 0.86 1.31 0.00 (28) -0.11 (30) 0.11 (14) 0.08 -2.14 (33) 1.11 STANLIB Balanced Trustees FoF A 23.79 4.08 0.02 (29) 0.98 1.06 -0.02 (29) -0.04 (26) 0.02 (18) 0.69 -0.86 (28) 1.05 NeFG Income Provider FoF 23.34 4.59 0.01 (30) 1.02 2.07 -0.03 (31) 0.29 ( 4) -0.32 (41) 0.00 3.30 ( 2) 1.82 Oasis Balanced Stable FoF 22.69 7.20 0.01 (31) 1.72 3.58 -0.06 (33) 0.03 (20) -0.09 (28) 0.41 0.33 (20) 1.95 MitonOptimal IP Diversified Income FoF 22.66 1.68 -0.02 (35) 0.26 3.27 -0.02 (30) -0.02 (23) 0.00 (20) 0.96 -0.40 (24) 1.19
  11. 11. A 36-month Risk-Return plot of the Prudential L,M,H categories MULTI-MANAGERS (October-2008 Risk September-2011) Average to 40 Southern Charter Growth FoF 1 35 Southern Charter Balanced FoF Southern Charter Defensive FoF 3 2 6 5 4 7 8 30 11 10 9 12 13 14 16 15 21 17 24 22 23 18 19 20 Average Return 25 27 28 26 33 30 36 34 32 31 29 35 41 39 37 40 38 42 43 44 45 25 49 4648 51 50 47 52 54 53 55 56 Return 57 60 59 58 61 63 62 64 65 67 66 68 69 20 70 71 72 73 74 15 75 76 77 10 5 0 2 4 6 8 10 12 14 RiskSource Cadiz
  12. 12. Winner of the Growling Bear Award* forthe top performing funds in the worstmarket ever!{*If there was such an award Southern Charter would win it hands down! For the followingcategories}Top Performing funds - In prudential high, medium, lowand variable categories over 3yrs ending Sep 2011Top performing - risk profiled prudential fundsTop performing - asset allocation prudential fundsTop performing - lifecycle retirement prudential fundsTop performing - Multi-manager on a risk adjusted basisTop performing - Multi-manager, white label multi-manager
  13. 13. Our Well DiversifiedAsset Allocation Investment Stategy Delivers More Certainty in an Uncertain World Mark Thompson Southern Charter.Com
  14. 14. Our Target MarketIdeally suited for investors who do not wish, nor have the inclination, to manage their own asset allocation and fund manager selection on an ongoing basis.
  15. 15. Thank You!

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