This specific equity fund is nine years old. It has 6 519 unitholders and manages assets of R613-million.The fund is managed by Richard Anderson for UAL Unit Trust Managers.
UNIT TRUSTS:UAL SELECTED OPPORTUNITIES
OBJECTIVE: To provide significantly greater returns than those achieved by the average general equity unit trust. This portfolio differs markedly from general equity trusts and its performance can vary widely in both directions in the short term.
TARGET MARKET: Investors who want higher returns, recognising that this involves higher risk. The fund provides the benefits of long-term investment in smaller companies, and medium- to long-term investment in large cyclical and recovery shares.
CHARGES: Compulsory: 0,77%; Initial: 5% maximum (on a sliding scale). Annual service fee: 1,14% (incl VAT).
MINIMUM INVESTMENT: Lump sum: R5 000; monthly debit order: R250; or R1 000 lump sum and R250 monthly.
PAST PERFORMANCE (per Micropal) THREE YEAR:
PAST TWO INCOME DISTRIBUTIONS: June 1996: 43,30 cents per unit (dividends 20%, interest 80%) September 1996: 42,57 cents per unit (dividends 39%, interest 61%)
TOP 10 HOLDINGS: Dimension Data, Industrial and Commercial Holdings, Trans-Natal, Siltek, Absa, United Services Technologies, Samancor, Clinic Holdings convertible debentures, Metropolitan Life, Mobile Industries.
ABOUT THE FUND MANAGER
QUALIFICATIONS: BA, HD Personnel Management, MBA
EXPERIENCE: 10 years as a share analyst and fund manager with UAL Merchant Bank; has managed this fund for seven years.
INVESTMENT ATTITUDE: The focus is exclusively on stock picking as opposed to asset allocation. Individual shares are chosen on merit but investment themes are used as a guideline in selection. Only shares in the bottom half of the JSE, according to size, are considered. The risk is managed by holding a larger than normal number of shares (40-50) to diversify the risk of individual shareholdings.
COMMENT: Industrial shares are preferred to mining shares because there is greater potential to add value. The fund's liquidity limit is 20% so it remains relatively fully invested in equities.
VIEW ON PAST PERFORMANCE: The performance record has been above average and is based on buying and holding shares in companies with superior growth prospects - many of which have a technological base (the large holding in Dimension Data has made a meaningful contribution to performance). We have invested in cyclical companies when they have been reasonably expected to contribute to performance. The emphasis given to managing risk is demonstrated in the below-average risk of past returns.
THE FUTURE: The fund will continue to focus on companies which will grow in spite of economic uncertainty.
As the fund's size has increased, so has the size of targeted companies: at inception the focus was on small companies; now it is on medium-sized companies.
INDEPENDENT ASSESSMENTThe fund was the first to invest in small companies - and its success is shown in its healthy long-term performance. But as it grew its focus changed, about three years ago, to medium-size companies - a process Anderson terms a natural progression.
It has achieved its objective of beating the average of the general equity funds in the longer term, but performance has fallen back in the past year and it has only managed to equal the average. It has been beaten by the two new funds in the sector which focus on small cap companies.
Leigh Roberts 12/96 Top of page