OLD MUTUAL ENHANCED INCOME FUND
May 2011
OLD MUTUAL ENHANCED INCOME FUND FUND INFORMATION 1 2 RISK RATING
FUND PERFORMANCE as at 31/05/2011 3
4
% PERFORMANCE (p.a.)
5
FUND OBJECTIVE The fund aims to outperform money market investments and produce a relatively high level of income. It aims not to lose money over any 6-month period. WHO IS THIS FUND FOR?
Fund (Class A) Benchmark Tax-exempt Investor Corporate Investor Private Investor Retirement Fund
This fund is suited to investors who want high income and returns
in excess of those from money markets over time, but with limited
risk of capital loss in the short term. The investor understands
that inflation is likely to erode the value of their investment in
the long term.
3-Yr
5-Yr
7-Yr
10-Yr
7.9 6.3 7.9 5.9 5.8 7.9
10.3 10.0 10.3 8.0 7.8 10.2
8.6 7.9 8.6 6.4 6.3 8.5
8.3 -
9.3 -
Since Inception
10.4 8.2 10.4 8.2 8.0 9.9
Old Mutual Enhanced Income Fund (1-Year Rolling)
RECOMMENDED MINIMUM INVESTMENT TERM 1 year+
1-Yr
3 years+
5 years+
INVESTMENT MANDATE The fund invests in the full spectrum of fixed interest investments as well as listed property shares when appropriate. It conforms to retirement fund legislation. BENCHMARK: 110% STeFI Call Deposit Index RISK OBJECTIVE:
RISK STATISTICS
FUND
ALL BOND
Modified Duration Annual Standard Deviation (3 Years Annualised) % Positive 6-Month Returns
0.56 3.4% 97.4%
5.85 8.1% 80.8%
The fund aims to protect capital over rolling 6-month periods.
ASISA CATEGORY:
Performance vs Risk Objective (6-Month Rolling Returns)
Domestic - Fixed Interest - Varied Specialist
FUND MANAGER(S): Wikus Furstenberg (OMIGSA - Futuregrowth Asset Management)
LAUNCH DATE: 01/07/2004
SIZE OF FUND: R2.6bn
DISTRIBUTIONS (Quarterly)*: Date Dividend Interest Total Yield 31/03/2011 0.00c 3.89c 3.89c 6.68% 31/12/2010 0.00c 3.99c 3.99c 6.78% 30/09/2010 0.00c 4.04c 4.04c 5.75% 30/06/2010 0.02c 4.07c 4.09c 6.12% *Class A fund distributions
OTHER INVESTMENT CONSIDERATIONS MINIMUM INVESTMENTS: Monthly: R500 • Lump sum: R10 000 • Ad hoc: R500
CURRENT YIELD: 6.63%
FUND COMPOSITION
Bonds 7 - 12 Years Bonds 3 - 7 years Bonds 1 - 3 years Money market instruments*
8.6% 16.7% 38.4% 36.3%
* Money market instruments include cash, NCDs and treasury bills
INITIAL CHARGES:
There is no initial administration charge for investment transactions of R500 and above. Initial adviser fee will be between 0% and 0.68%.
CURRENT PRINCIPAL HOLDINGS as at 31/03/2011
Investment transactions below the R500 fund minimum incur a 0.46% administration
HOLDING
SECTOR
charge.
Republic of SA R203 8.25% 2017 R204 8.00% 21/12/2018 Money Market DVF12 13/10/2012 RSA 5.5% 07/12/2023 FRJ14 20/07/2014 Mercedes Benz FRN 06/10/2011 CLN57 IPL 30/04/2013 NBK1B FRN 09/09/2012 MTN 10.19% 13/07/2014
3 7 0 1 7 3 1 1 1 3
ONGOING: Annual service fee (min./max.): 1.14% p.a. This fee is accrued daily and paid to the management company on a monthly basis. Other charges incurred by the fund, and deducted from its portfolio, are included in the TER.
Total expense ratio (TER): 1.14% TER is a historic measure and includes the annual service fee.
Funds are also available via Fairbairn Capital and MAX Investments. Helpline 0860 234 234 Fax +27 21 509 7100 Internet www.omut.co.za Email [email protected]
-
7 Years Bonds 12 Years Bonds 3 Years NCD 3 Years Bonds 12 Years Bonds 7 Years Bonds 3 Years Bonds 3 Years Bonds 3 Years Bonds 7 Years Bonds
% OF FUND 15.5 8.7 5.4 3.6 2.5 2.5 2.1 2.1 1.7 1.6
OLD MUTUAL ENHANCED INCOME FUND FUND COMMENTARY as at 31/05/2011
FUND MANAGER INFORMATION WIKUS FURSTENBERG
Fund positioning turned more defensive during May, following the further reduction of the fixed rate RSA government bond holding into market strength. Proceeds
QUALIFICATIONS:
from the sale were allocated to cash, short-dated money market instruments and
MCom (Economics)
inflation-linked bonds in anticipation of rising inflation and the start of the interest rate tightening cycle. We have managed to buy some variable rate bonds, but the net position was largely unchanged following redemptions earlier in the month. The average yield of the fund continues to drift lower as market rates decline, while
CURRENT RESPONSIBILITY:
the selling of fixed rate bonds in anticipation of possible future capital losses also
Wikus manages a range of fixed interest portfolios, which include
impacted the yield negatively.
the Enhanced Income Fund, Namibia Enhanced Income Fund and the fixed interest component of the Real Income Fund.
Therefore, the fund retains a significant holding in assets such as cash, variable rate bonds and inflation-linked bonds, which are deemed more appropriate for this point
PREVIOUS EXPERIENCE:
in the interest rate cycle. In the light of this, we will look for opportunities to further
Wikus joined Old Mutual Investment Group South Africa (OMIGSA)
reduce the fixed rate government bond holding. We will also continue to avoid asset
in August 1999 as a fixed interest portfolio manager from ABN
classes such as listed property, which could potentially increase the return volatility
AMRO Securities. He started his career in the Economics
of the fund significantly.
Department of the South African Reserve Bank. In 1995, he joined ABSA Bank Treasury as a Treasury economist and pursued this position until 1997.
The above portfolio performance is calculated on a NAV-NAV basis and does not take any initial fees into account. Income is reinvested on the ex-dividend date. Actual investment performance will differ based on the initial fees applicable, the actual investment date and the date of reinvestment of income. Lump sum basis. Performances are in ZAR and as at 31 May 2011. Sources: Morningstar and OMIGSA (estimated inflation figure for month of May 2011). Unit trusts are generally medium- to long-term investments. Past performance is no indication of future growth. It is important that you are prepared for some shorter term fluctuations as your investment moves in line with the markets. Fluctuations or movements in exchange rates may cause the value of underlying international investments to go up or down. Unit trusts can engage in borrowing and scrip lending. A schedule of fees and charges and maximum commissions is available from the company/intermediary. You can easily sell your investment at the ruling price of the day (calculated at 15h00 on a forward pricing basis and 17h00 at month-end for Old Mutual RAFI® 40 Tracker Fund and Old Mutual Top 40 Fund). The Old Mutual Money Market Fund unit price aims to be static but investment capital is not guaranteed. The total return is primarily made up of interest (declared daily at 13h00), but may also include any gain/loss on any particular instrument and this may result in a capital loss in extreme cases. Specialist equity funds may hold a greater risk as exposure limits to a single security may be higher. A feeder fund portfolio is a portfolio that, apart from assets in liquid form, consists solely of units in a single portfolio of a collective investment scheme. A fund of funds unit trust invests only in other collective investment schemes, which may levy their own charges. Certain funds may be capped in order to be managed in accordance with their mandates. Different classes of units apply to these portfolios and are subject to different fees and charges. Old Mutual is a member of the Association for Savings & Investment SA.
Funds are also available via Fairbairn Capital and MAX Investments. Helpline 0860 234 234 Fax +27 21 509 7100 Internet www.omut.co.za Email [email protected]
OLD MUTUAL ENHANCED INCOME FUND FUND INFORMATION 1 2 RISK RATING
FUND PERFORMANCE as at 31/05/2011 3
4
% PERFORMANCE (p.a.)
5
FUND OBJECTIVE The fund aims to outperform money market investments and produce a relatively high level of income. It aims not to lose money over any 6-month period. WHO IS THIS FUND FOR?
Fund (Class A) Benchmark Tax-exempt Investor Corporate Investor Private Investor Retirement Fund
This fund is suited to investors who want high income and returns
in excess of those from money markets over time, but with limited
risk of capital loss in the short term. The investor understands
that inflation is likely to erode the value of their investment in
the long term.
3-Yr
5-Yr
7-Yr
10-Yr
7.9 6.3 7.9 5.9 5.8 7.9
10.3 10.0 10.3 8.0 7.8 10.2
8.6 7.9 8.6 6.4 6.3 8.5
8.3 -
9.3 -
Since Inception
10.4 8.2 10.4 8.2 8.0 9.9
Old Mutual Enhanced Income Fund (1-Year Rolling)
RECOMMENDED MINIMUM INVESTMENT TERM 1 year+
1-Yr
3 years+
5 years+
INVESTMENT MANDATE The fund invests in the full spectrum of fixed interest investments as well as listed property shares when appropriate. It conforms to retirement fund legislation. BENCHMARK: 110% STeFI Call Deposit Index RISK OBJECTIVE:
RISK STATISTICS
FUND
ALL BOND
Modified Duration Annual Standard Deviation (3 Years Annualised) % Positive 6-Month Returns
0.56 3.4% 97.4%
5.85 8.1% 80.8%
The fund aims to protect capital over rolling 6-month periods.
ASISA CATEGORY:
Performance vs Risk Objective (6-Month Rolling Returns)
Domestic - Fixed Interest - Varied Specialist
FUND MANAGER(S): Wikus Furstenberg (OMIGSA - Futuregrowth Asset Management)
LAUNCH DATE: 01/07/2004
SIZE OF FUND: R2.6bn
DISTRIBUTIONS (Quarterly)*: Date Dividend Interest Total Yield 31/03/2011 0.00c 3.89c 3.89c 6.68% 31/12/2010 0.00c 3.99c 3.99c 6.78% 30/09/2010 0.00c 4.04c 4.04c 5.75% 30/06/2010 0.02c 4.07c 4.09c 6.12% *Class A fund distributions
OTHER INVESTMENT CONSIDERATIONS MINIMUM INVESTMENTS: Monthly: R500 • Lump sum: R10 000 • Ad hoc: R500
CURRENT YIELD: 6.63%
FUND COMPOSITION
Bonds 7 - 12 Years Bonds 3 - 7 years Bonds 1 - 3 years Money market instruments*
8.6% 16.7% 38.4% 36.3%
* Money market instruments include cash, NCDs and treasury bills
INITIAL CHARGES:
There is no initial administration charge for investment transactions of R500 and above. Initial adviser fee will be between 0% and 0.68%.
CURRENT PRINCIPAL HOLDINGS as at 31/03/2011
Investment transactions below the R500 fund minimum incur a 0.46% administration
HOLDING
SECTOR
charge.
Republic of SA R203 8.25% 2017 R204 8.00% 21/12/2018 Money Market DVF12 13/10/2012 RSA 5.5% 07/12/2023 FRJ14 20/07/2014 Mercedes Benz FRN 06/10/2011 CLN57 IPL 30/04/2013 NBK1B FRN 09/09/2012 MTN 10.19% 13/07/2014
3 7 0 1 7 3 1 1 1 3
ONGOING: Annual service fee (min./max.): 1.14% p.a. This fee is accrued daily and paid to the management company on a monthly basis. Other charges incurred by the fund, and deducted from its portfolio, are included in the TER.
Total expense ratio (TER): 1.14% TER is a historic measure and includes the annual service fee.
Funds are also available via Fairbairn Capital and MAX Investments. Helpline 0860 234 234 Fax +27 21 509 7100 Internet www.omut.co.za Email [email protected]
-
7 Years Bonds 12 Years Bonds 3 Years NCD 3 Years Bonds 12 Years Bonds 7 Years Bonds 3 Years Bonds 3 Years Bonds 3 Years Bonds 7 Years Bonds
% OF FUND 15.5 8.7 5.4 3.6 2.5 2.5 2.1 2.1 1.7 1.6
OLD MUTUAL ENHANCED INCOME FUND FUND COMMENTARY as at 31/05/2011
FUND MANAGER INFORMATION WIKUS FURSTENBERG
Fund positioning turned more defensive during May, following the further reduction of the fixed rate RSA government bond holding into market strength. Proceeds
QUALIFICATIONS:
from the sale were allocated to cash, short-dated money market instruments and
MCom (Economics)
inflation-linked bonds in anticipation of rising inflation and the start of the interest rate tightening cycle. We have managed to buy some variable rate bonds, but the net position was largely unchanged following redemptions earlier in the month. The average yield of the fund continues to drift lower as market rates decline, while
CURRENT RESPONSIBILITY:
the selling of fixed rate bonds in anticipation of possible future capital losses also
Wikus manages a range of fixed interest portfolios, which include
impacted the yield negatively.
the Enhanced Income Fund, Namibia Enhanced Income Fund and the fixed interest component of the Real Income Fund.
Therefore, the fund retains a significant holding in assets such as cash, variable rate bonds and inflation-linked bonds, which are deemed more appropriate for this point
PREVIOUS EXPERIENCE:
in the interest rate cycle. In the light of this, we will look for opportunities to further
Wikus joined Old Mutual Investment Group South Africa (OMIGSA)
reduce the fixed rate government bond holding. We will also continue to avoid asset
in August 1999 as a fixed interest portfolio manager from ABN
classes such as listed property, which could potentially increase the return volatility
AMRO Securities. He started his career in the Economics
of the fund significantly.
Department of the South African Reserve Bank. In 1995, he joined ABSA Bank Treasury as a Treasury economist and pursued this position until 1997.
The above portfolio performance is calculated on a NAV-NAV basis and does not take any initial fees into account. Income is reinvested on the ex-dividend date. Actual investment performance will differ based on the initial fees applicable, the actual investment date and the date of reinvestment of income. Lump sum basis. Performances are in ZAR and as at 31 May 2011. Sources: Morningstar and OMIGSA (estimated inflation figure for month of May 2011). Unit trusts are generally medium- to long-term investments. Past performance is no indication of future growth. It is important that you are prepared for some shorter term fluctuations as your investment moves in line with the markets. Fluctuations or movements in exchange rates may cause the value of underlying international investments to go up or down. Unit trusts can engage in borrowing and scrip lending. A schedule of fees and charges and maximum commissions is available from the company/intermediary. You can easily sell your investment at the ruling price of the day (calculated at 15h00 on a forward pricing basis and 17h00 at month-end for Old Mutual RAFI® 40 Tracker Fund and Old Mutual Top 40 Fund). The Old Mutual Money Market Fund unit price aims to be static but investment capital is not guaranteed. The total return is primarily made up of interest (declared daily at 13h00), but may also include any gain/loss on any particular instrument and this may result in a capital loss in extreme cases. Specialist equity funds may hold a greater risk as exposure limits to a single security may be higher. A feeder fund portfolio is a portfolio that, apart from assets in liquid form, consists solely of units in a single portfolio of a collective investment scheme. A fund of funds unit trust invests only in other collective investment schemes, which may levy their own charges. Certain funds may be capped in order to be managed in accordance with their mandates. Different classes of units apply to these portfolios and are subject to different fees and charges. Old Mutual is a member of the Association for Savings & Investment SA.
Funds are also available via Fairbairn Capital and MAX Investments. Helpline 0860 234 234 Fax +27 21 509 7100 Internet www.omut.co.za Email [email protected]
