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 Stable and Palmyra 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) to take advantage of the downward movement in bond yields, while still benefiting from the attractive real yields available.
During the quarter we maintained our foreign equity exposure in both funds at positive (Stable Fund exposure 16.5% and Balanced Fund exposure 32%) and increased our exposure to SA shares, capturing the positive market sentiment post the SA elections and the formation of the Government of National Unity.
During the quarter we took some profits by reducing our weight to listed property for both the Stable (down to 3.0%) and Balanced Funds (down to 6.0%).
| Asset Class | Stable Fund Allocation | Balanced Fund Allocation |
|---|---|---|
| Cash | Underweight | Underweight |
| Bonds | Neutral | Neutral |
| Property | Positive | Positive |
| Local Equity | Positive | Positive |
| Foreign Equity | Positive | Positive |
The Palmyra SA Equity Fund is a general equity fund that follows a bottom-up investment philosophy and only invests into South African equities. We increased our exposure to SA Inc shares, capturing the positive market sentiment after the SA elections and the formation of the Government of National Unity.
The fund ended the quarter marginally overweight financials and resources and underweight industrials.
The Palmyra Property Fund is a benchmark cognisant fund that follows a 12-month total return momentum factor investment strategy, and at the end of the quarter held a relative overweight position in Fortress Real Estate Investments, Fairvest Limited, Lighthouse Properties Plc, Redefine Properties Limited and Resilient REIT Limited.
Underweight positions were in Burstone Group, Equities Property Fund, MAS Plc, Sirius Real Estate Limited and Stor-Age Property REIT Limited.
The Palmyra Global Flexible Fund of Funds is a top-down managed fund and in line with our house view, we increased our exposure to foreign equity to 78.32%. Foreign fixed income and cash was reduced to 21.68, while maintaining a marginally shorter modified duration of 5.9 relative to the benchmark duration of 6.5 We do expect that developed market central banks will continue cutting interest rates in Q4 2024 and will adjust our duration appropriately.
Our geographic allocation continues to favour an overweight exposure to the US over Europe and UK equities.
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