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 lengthened relative to the JSE All Bond Index (ALBI) due to the attractive real yields available.
During the quarter we marginally increased our foreign equity exposure in both funds to positive (Stable Fund exposure at 17%% and the Balanced Fund exposure was 32%) and maintained our neutral weighting to SA shares as they remain attractive on a relative basis.
The fund ended the quarter marginally overweight resources and industrials and remained underweight financials relative to the FTSE/JSE Capped SWIX, and we increased our weight to the listed property sector for both the Stable, up to 3.5% and the Balanced Fund up to 5.0%, on improving property metrics.
| MULTI-ASSET STRATEGIC ASSET ALLOCATION |
STABLE FUND |
BALANCED FUND |
|---|---|---|
| Cash | Underweight | Underweight |
| Bonds | Neutral | Neutral |
| Property | Positive | Positive |
| Local Equity | Neutral | Neutral |
| Foreign Equity | Positive | Positive |
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 and the rand hedges as our local valuations are still looking relatively more attractive.
The fund ended the quarter marginally overweight resources and industrials and remained 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 the quarter we switched to a relative overweight position in Attacq Limited, Equities Property Fund, Fairvest Limited, Hyprop Investments Limited and Resilient REIT Limited.
Our underweight positions are in Emira Property Fund Limited, Growthpoint Properties Limited, Lighthouse Capital Limited, NEPI Rockcastle and Sirius Real Estate Limited.
The Palmyra BCI Global Flexible Fund of Funds is managed according to a top-down investment process, and in line with our house view, we increased our exposure to foreign equity to ~85%, while foreign fixed income was reduced to ~10% with cash (~5%) making up the balance of the fund. We maintained a marginally shorter modified duration of 6.1 relative to our fixed income benchmark duration of 6.5.
As anticipated, the US Fed has continued to delay their cutting cycle with rates only expected to decline later into 2025 due to the tariff wars. We will continue to adjust our duration in line with these moves.
Our geographic allocation favours an overweight exposure to developed market equities and are neutral equities domiciled in the US relative to their weight in the MSCI World benchmark.
Please click on the Palmyra logo for a link to its website where you will find more information on the company and funds managed.
Other sections to read:
The below FSCA regulated companies, who conduct asset management and investment services, are owned by Orion Investment Managers (OIM). These subsidiary companies operate in a number of different jurisdictions, and each provides investment management and products to their clients. Orion Investment Managers, is, in turn, owned by Spirit Invest International, which owns a portfolio of companies in the investment sector...
Read More.
