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SELECT BCI BLENDED EQUITY STRATEGY FUND

Background

The Select BCI Blended Equity Strategy Fund aims to combine the investment outcomes of fundamental equity and smart beta equity management strategies and thereby deliver a less volatile, enhanced equity capital growth outcome over the long term. The portfolio invests primarily in a diversified basket of equities selected by the fundamental and smart beta managers. The fundamental equity component has a focus on maximizing total returns for the client. The component will be actively invested in equities with capital appreciation and income potential with the goal to outperform the benchmark over the medium to long term. The smart beta component follows a multi-factor investment process applying factors such as Value, Quality, Momentum and Volatility to outperform the benchmark over the medium to long term.

Investment philosophy and process

Fundamental Equity Component
The fundamental equity component is managed by Fairtree’s Stephen Brown and Cor Booysen and focuses on maximizing total returns from domestically listed equities. This component is actively invested in equities with capital appreciation and income potential with the goal to outperform the benchmark over the medium to long term. The Fairtree approach to fundamental equity investment is flexible and allows the team to move between investment styles and actively trade the portfolio as deemed appropriate given the market environment. In doing so, the portfolio managers can successfully navigate periods when a particular investment style underperforms the market. The team will tend to have a positive bias to reasonably priced leading companies in industries that are benefitting from prevailing economic conditions.

Smart Beta Component
The smart beta component is a combination of the factor-based strategies managed by Satrix, using their SmartCore methodology, and Colourfield utilising rules based strategies and technology in partnership with their international partner Dimensional. Dimensional is a global firm with a long history of applying academic research to practical investing. The firm’s investment philosophy is founded on the award-winning and foundation research of Eugene Fama, Kenneth French (Fama-French) and others. Colourfield employs their methodology in the South African market. The smart beta component of the fund includes domestic, as well as foreign equity exposure, as permitted by the mandate. Portfolio rebalancing based on the output of the rules-based models is implemented astutely by the mangers to manage trading costs.

CORE INVESTMENT TEAM – EQUITY – FAIRTREE

CORE INVESTMENT TEAM – SMART BETA

Stephen Brown

  • Equity Portfolio Manager
  • BCom, MBA, CFA
  • Joined Fairtree in 2011
  • 23 years’ experience

Cor Booysen

  • Equity Portfolio Manager
  • B.Ing
  • Joined Fairtree in 2012
  • 16 years’ experience