PALMYRA ASSET MANAGEMENT

Palmyra Asset Management manages local equity and multi-asset funds on behalf of its institutional and individual clients, following a bottom-up valuation methodology to seek out true value and innovative opportunities.

The Palmyra BCI Stable and Palmyra BCI Balanced Funds maintained their neutral exposure to South African nominal bonds over the quarter. However, the effective duration of the funds was shortened relative to the JSE All Bond Index (ALBI) due to increased volatility and risk. The fund continues to benefit from the attractive real yields available.

During the quarter we maintained our foreign equity exposure in both funds at neutral (Stable Fund exposure at ~16.5% and the Balanced Fund exposure was maintained at ~32%) and maintained our exposure to SA shares as they continue to look attractive on a relative basis.

During the quarter we took profits and reduced our weight to listed property for both the Stable, down to 2.5% and Balanced Fund down to 5.0%.

The Palmyra BCI SA Equity Fund is a general equity fund that follows a bottom-up investment philosophy and only invests into South African equities. We maintained our exposure to SA Inc shares vs rand hedges as our local valuations still look relatively more attractive.

The fund ended the quarter marginally overweight resources, neutral industrials and underweight financials relative to the FTSE/JSE Capped SWIX.

The Palmyra BCI Property Fund is a benchmark cognisant fund that follows a 12-month total return momentum factor investment strategy. The fund is rebalanced quarterly and at the end of March held a relative overweight position in Fortress REIT Limited, Fairvest Limited, Hyprop Investments Limited, MAS Real Estate and Resilient REIT Limited.

Our underweight positions are in Equities Property Fund Limited, Lighthouse Capital Limited, NEPI Rockcastle, Sirius Real Estate Limited and Stor-Age Property REIT Limited.

The Palmyra BCI Global Flexible Fund of Funds is a top-down managed fund and in line with our house view, we maintained our exposure to foreign equity at ~80%, while foreign fixed income and cash made up the balance of the fund. We maintained a marginally shorter modified duration of 6.4 relative to our fixed income benchmark duration of 6.5.

We expect that the US Fed will delay cutting interest rates during 2025 as the tariff wars play out and we will adjust our duration in line with these moves.

Our geographic allocation continues to favour an overweight exposure to developed market equities domiciled in the US.