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2 Nov 2018
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World Market Correction

 

World markets have taken a severe correction over the past two months with the S&P500 down by -9.43% from its highest point, the MSCI World index down -12%, Emerging Markets down with -20% and the JSE down with -14.9% YTD (in USD terms -29%).

 

We are thankful that our three Fund of Funds have not fallen as much.

 

LOCAL UNIT TRUST FUNDS

 

Oct 2018

YTD (31 Oct 2018)

Kanaan Bci Balanced FoF

-3.72%

-3.01%

 

LOCAL HEDGE FUNDS

 

Sep 2018

YTD (30 Sep 2018)

Kanaan Hedge FoF

-4.60%

-1.98%

 

OFFSHORE HEDGE FUNDS

 

Sep 2018

YTD (30 Sep 2018)

Moriah Global FoF (USD)

-0.28%

9.54%

Moriah Global FoF (ZAR)

-4.20%

25.31%

 

Clients who have had money invested in our Moriah Global FoF can be happy. Though our South African funds have done much better than the -14.9% YTD of the JSE, the return of Kanaan Hedge FoF for 2016 was -6.1%, for 2017 it was -4.7% and up to end of September -1.98% and Kanaan Balanced FoF have not done much better with -8.69% for 2016 and 6.56% for 2017 and up to end of October 2018 is now at -3.01%. That is the worst that we have seen quality South African funds performed since we have started managing funds +/-30 years ago! South African shares got a hiding after Nene-Gate by the end of 2016 and now again because of the global share market correction, which has caused quality South African shares to be very undervalued. From a market perspective, South Africa has a much better president since 2018, busy dealing with corruption and attracting billions in investments. We have seen that global markets are starting to turn around, as well as the South African market and we believe that it would be unwise at this stage to switch from growth funds to cash or even from South African growth funds to offshore growth funds, taking the weak Rand into account.

 

We also trust that president Ramaphosa will start to do away with unnecessary regulations, as president Trump of the USA has been doing since his election. If you do have an investment in our Kanaan SNN Fund of Hedge Funds, please take note of the attached once per annum technical risk report, as required by regulations.

 

Friendly greetings

 

Andre Delport

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