Portfolio Management

Portfolio Management

Portfolio Management

Introduction

Every Asset Manager is required to prepare a monthly Fund Managers Report (FMR) and make it available on their website in a standardized format. The contents of the monthly Fund Managers Report shall be categorized into two sections; Mandatory Information and Voluntary Information. The mandatory information shall be further standardized into standard section headings and information within those sections, including the format for presentation, must be included in every Fund Managers Report across the industry. The mandatory information should be on first page (page 1/front page) and the voluntary information may be on the second page. Unless specifically mentioned otherwise, all the sections shall apply to all categories. It is mandatory for all open-end funds to issue a monthly Fund Managers within the stipulated time frame, complying with the mandatory information. Below is the fund managers` information and their market recommendation (Crawford, 2002).

Management

Artisan - Dan O'Keefe & David Samra Global Managed & Global Unit Trust

The month of July passed with the market concerned over the US debt ceiling and European sovereign debt issues. The creation and expansion of the European Financial Stability Facility (EFSF), designed to use AAA European sovereigns to buy in bonds or provide liquidity to peripheral countries, initially helped sentiment. However, the recent selling of sovereign debt of larger economies such as Spain and Italy have turned a bearish view into what looks today like a panic. Many of the companies in the portfolio reported what we believe to be good progress in growing the value of their businesses in the second quarter (Guilding, 2009).

There were a few negatives, such as Publicis and 3M, where margins were a bit short of our expectations, but those were balanced by just as many positives. Nevertheless, the market has become indiscriminate in its behaviour. ING, for example, recently announced the disposal of assets at well above book value and announced (on August 4) annualised earnings of 6 billion euros. Yet the shares have been marked down. The market cap at 24.7 billion euros is now equal to 4.4x current earnings and 0.5x book value. Clearly, this valuation implies a significant disruption to the system. Stocks have fallen considerably since we last wrote and the discount to intrinsic value of the portfolio is approaching historical highs. We have been slowly deploying cash balances into the shares of existing companies. We have not bought anything new this month, as hurdle rates are now significant. We will continue to use any further selling to take advantage of today's lower prices for the same businesses we owned yesterday and potentially some that we did not.

AXA Framlington - Richard Peirson AXA Framlington Managed & Balanced Managed Unit Trust

July saw all equity markets drift lower as sovereign debt concerns in Europe and uncertainty over the US deficit reduction plan dominated. Macro growth data was also disappointing. Bonds however, benefitted from rising risk aversion. At a sector level, more cyclical areas underperformed, particularly miners, as investors worried about a ...