This general equity fund was launched in October 1991. It has 24 000 unitholders and assets of R130-million under management. The fund is managed by Charles Foster for Metropolitan Life Asset Management.
UNIT TRUSTS:METLIFE GENERAL EQUITY
OBJECTIVE: The fund aims to provide an easy, efficient and affordable vehicle for investing in shares on the Johannesburg Stock Exchange.
The medium- to long-term strategy is to ensure superior returns while containing the risk associated with equities.
This objective is achieved by providing a broadly diversified portfolio and active management.
TARGET MARKET: Investors who want to enjoy substantial returns from the JSE over the medium to long term.
CHARGES: Compulsory: 1% plus VAT; Initial: 5% maximum (negotiable). Annual service fee: 1,14% including VAT.
MINIMUM INVESTMENT: Lump sum: R500, monthly debit order: R50.
PAST PERFORMANCE (per Micropal) THREE YEAR:
PAST TWO INCOME DISTRIBUTIONS: February1996: 1,99c (49% interest, 51% dividends);
August 1996: 2,31c (52% interest, 48% dividends).
TOP 10 HOLDINGS: Dimension Data, Metlife, De Beers, Anglo American, New Africa Investments Ltd, Barlows, Investec Bank, Richemont, JCI Ltd, Imperial Holdings.
TOLL FREE NUMBER: 0 800 2102 55
ABOUT THE FUND MANAGER
QUALIFICATIONS: BSc; Fellow of the Institute of Actuaries
EXPERIENCE: Has been managing the fund since January 1995 and has spent the past nine years in Metropolitan Life's investment division. Has 20 years experience in the life insurance industry.
INVESTMENT ATTITUDE: The management follows a team approach. The fund favours shares that represent quality and value and will appreciate over time.
We take a long-term view of the market and normally hold shares for at least a year. Therefore, we ride out fluctuations in price but try to eliminate the volatility. The fund is relatively small and holds 30 to 35 shares.
COMMENT: The fund remains overweight in stocks in the electronics and financial sectors which have performed well in the past year.
We have limited our exposure to cyclical stocks which have been under pressure. The fund is almost fully invested with only 9% in cash.
VIEW ON PAST PERFORMANCE: The fund's return on a lump-sum investment for both one- and two-year periods is the highest for all general equity funds. This performance vindicates the strategic change from a relatively balanced investment approach to a fully fledged equity fund.
The underperforming stocks of the portfolio have been trimmed, which has contributed to the fund's recent success.
Choice of sector has been crucial in the past and will remain so.
THE FUTURE: The fund is well structured to benefit from any market opportunities.
Shares which are supported by global economic growth may provide the best opportunities. International diversification of the fund is imminent.
INDEPENDENT ASSESSMENTSince the change in strategy the fund has performed exceptionally well on the back of good stock selection. Its one year return, as leader of the pack, is about 30%. The risk is that it is still early days: the management team has proved itself in the short-term - the test is whether it can continue to select shares of a similar quality.
The portfolio is a good blend, but the large holdings in certain shares makes the fund vulnerable to any corrections.
(Leigh Roberts - 11/96)