FAIRTREE ASSET MANAGEMENT - SELECT BCI ENHANCED EQUITY FUND
Fairtree Asset Management is a multi-strategy fund management business, headquartered in Cape Town, with a total of R58 billion. The firm consists of approximately 40 investment professionals across more than 10 specialist investment teams. The portfolio managers are assisted by Fairtree’s individual investment teams including a team of centralised equity analysts.
INVESTMENT PHILOSOPHY AND PROCESS
The objective of the fund is to combine the investment outcomes of Fairtree’s fundamental equity and smart beta equity management strategies into a single product. This allows the fund to deliver a less volatile enhanced equity capital growth outcome to investors over the long term.
Fundamental Equity Component
The fundamental equity component is managed by 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 managed by Rademeyer Vermaak and follows a quantitative multi-factor investment process applying valuation, quality, momentum, volatility and investment factors to create and manage a factor-optimised portfolio that outperform the benchmark over the medium- to long-term. 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 factor model is implemented astutely to manage trading costs.
Additionally, the implementation of the overall fund across the fundamental and smart beta components are optimised to limit trading impact and cost.