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STANLIB Global Equity Fund STANLIB Offshore Ltd STANLIB Global Equity Fund News Stanlib Global Equity comment - Sep 19 Monday, 9 December 2019 Fund Manager Comment Market Background Despite bouts of volatility, global equities ended the quarter in positive territory, with the MSCI ACWI up 1.2% in local-currency terms. The re-escalation of USChina trade tensions temporarily unnerved markets, with both sides exchanging further tariff blows in August. However, the subsequent agreement for a fresh round of talks drove a recovery, as did accommodative moves by central banks. North American and Europe ex UK stocks benefited from interest rate cuts, but optimism was kept in check by signs of damage from the trade war and some weak economic data. In the UK, the new Prime Minister Boris Johnson’s ‘do or die’ Brexit stance weighed on stocks. Meanwhile, emerging markets lagged on fears about economic growth, a firmer US dollar and reports that President Trump was planning to delist Chinese stocks from US stock exchanges. Japanese stocks fared well. The Bank of Japan hinted at further easing, as policymakers cited lost momentum in attaining the 2% inflation target. Utilities and consumer staples led returns against a backdrop of rising volatility and falling core government bond yields, which weighed on financials. Energy and materials lagged, as concerns around global growth and demand lingered. Performance Gross of fees, the fund underperformed its index but remains well ahead over the year to date. Sector allocation was the main cause of the quarter’s underperformance, with the underweight in utilities detracting most. Stock selection was neutral, as gains from our selections in communication services helped to offset detraction from those in health care. At the stock level, managedcare enterprise Centene detracted. The loss of a renewal contract in Louisiana weighed on the stock, as did the talks of a national health plan by Democratic presidential candidates. Centene plans to expand its exchange business next year, which could generate synergies. India's HDFC Bank also lagged after reporting some weakness in retail loan growth. More positively, margins were stable and asset quality held up well. Corporate tax cuts by the Indian government buoyed the stock later on. Google’s parent company Alphabet was our strongest performer after it reported a reacceleration in revenue growth and healthy margin expansion. We believe that the market is underestimating the sustainability of Alphabet’s growth. Equinix also added value after reporting a strong quarter for recurring revenues. Outlook Global equity markets have been providing evidence of the value to be found in secular winners that can sustainably outgrow their peers. With scope for these businesses to positively re-rate and expectations that volatility will remain somewhat elevated, we believe the backdrop is ideal for investors with the ability to identify undervalued, long-term opportunities. While factors such as technological regulation and trade may remain in focus in the short term, we feel that structural factors driving a world which is ‘lower for longer’ will shape markets further into the future. We therefore retain our focus on companies with durable competitive advantages, as we believe these are best placed to sustain high returns on capital and earnings growth through the market cycle.   STANLIB Global Equity comment - Mar 19 Tuesday, 11 June 2019 Fund Manager Comment Fund Commentary: 1st Quarter Market Background - Global equities rose strongly over the first quarter, with the MSCI AC World index rising 12.4% in local terms. While concerns around the pace of global growth persisted, investors welcomed the dovish shift of the Federal Reserve, Chinese economic stimulus measures and apparent progress in US-China trade talks. - North American equities drove appreciation over the period, supported by a wave of positive economic data. Trade developments benefited Japanese and European stocks, whilst China outperformed as bank lending reached record highs with stimulus measures taking hold. Despite the continued decline of bond yields, higher growth stocks outpaced their defensive peers. The technology sector led returns, aided by the resurgent semiconductor space, whilst energy rallied on oil supply restrictions. By contrast, utilities and healthcare lagged, as did rate sensitive financials as interest-rate-hike expectations moderated. Activity - During the quarter, we initiated a holding in healthcare product provider Baxter. We believe transitory weakness in its medication delivery and nutrition sales will improve and that product launches can boost returns. We also bought Alexion Pharmaceuticals, a developer of therapies for patients with rare conditions. Acquisitions should help it diversify its revenues and bolster its pipeline - Elsewhere, we bought alcoholic beverage producer Pernod Ricard based on the prospects of an earnings upgrade cycle, and diversified luxury goods group LVMH, which has been gaining market share. The latter boasts pricing power with a peer-leading margin structure. Other additions included composite decking manufacturer Trex, founded on its planned product launches, its strong distribution network, and the secular conversion to composites by consumers. - Sales included Bank of America, which now has efficiency gains priced into the shares; and Schlumberger, on concerns of underinvestment. We also sold Sekisui Chemical, believing that its capital return improvements have peaked. Outlook - Global markets continue to provide evidence of the value to be found in sustainably growing, secular opportunities. With scope for further re-rating and expectations that volatility should remain elevated, we believe this backdrop is ideal for investors capable of identifying the market’s long-term winners. - While factors such as technological regulation and trade remain in focus, we believe that structural factors promoting a world which is ‘lower for longer’ remain in place. This should ensure that companies which can sustain above-average growth remain attractive. We therefore retain our focus on companies with durable competitive advantages, as we believe these names are best-placed to sustain high returns on capital and earnings growth through the market cycle.   Stanlib Global Equity comment - Mar 16 Wednesday, 15 June 2016 Fund Manager Comment Fund Review After an excellent return in the December quarter of +6.9% in dollars (benchmark +5.2%), the fund encountered very difficult markets in the first quarter of 2016, returning -2.4% (benchmark +0.4%). Over the year to end March 2016 the fund returned -2.5% in dollars (benchmark -3.8%). Sector allocation hurt during the quarter, with underweights in energy and materials (including mining) plus an overweight in healthcare and technology (together 39% of the portfolio) hurt relative returns. The portfolio’s US return was -1.6%, with the US at 58.8% of the portfolio (benchmark 53.2%). The worst return of the bigger countries came from Japan with -9.1%. Fortunately the portfolio is even more underweight in Japan at 4.7% of portfolio (benchmark 7.5%). By comparison, the Brazilian return was +36%, but is only 0.5% of the portfolio. The fund, is still overweight in Emerging Markets at 11.2% of portfolio versus 10.2% for benchmark (10.5% at end September). Shares in China comprise most of this, followed by shares in Mexico. Europe excluding the UK is now slightly overweight at 16.1% (benchmark 15.6%). Alphabet, Google’s holding company, is the biggest share in the portfolio at 4.4% of portfolio, followed by Amazon.com, Facebook, Gilead Sciences, AON and JP Morgan. Looking ahead Columbia Threadneedle expects developed stock markets to continue to climb the proverbial wall of worry. They are focusing on company-led growth as they believe economic growth will remain subdued and companies that can deliver consistent growth in this environment will be attractive investments. They also prefer secular-growth companies and high quality franchises, rather than cyclical areas of the market.   Stanlib Global Equity comment - Jun 14 Monday, 15 September 2014 Fund Manager Comment Fund Review Global Equity returned 3.45% in the quarter to end June after a negative return in the first quarter of 2014. The return for the six months to end June was 2.37%. The fund is underperforming so far in 2014, after an excellent 2013. The fund's underweight in Europe (-2.8%) and overweight in Japan (+4.9%) added value in quarter two, but this was more than offset by emerging markets outperforming (fund underweight by 3%) and the UK too (underweight by 0.8%). The fund remains overweight in the US (54% versus 49% for the benchmark), but this is down from 61% at end March. In share selections, strong showings in consumer discretionary, consumer staples and energy shares were outweighed by weakness in financials and IT. Looking ahead The fund manager, Thread needle Investments in London, believes that the strong relative performance of cyclical shares is warranted by improving economic data, but given the risk/reward balance, they still favour quality shares with secular growth, ie they prefer the lower risk route, even at the expense of lower returns in the short-term. Although it has been over two years since the US stock market fell by 10% or more and although a correction like this could occur at any time, the bull market remains firmly intact, even after 5.25 years. With economies neither too hot nor too cold, both inflation and short-term and long-term interest rates remain very low, which is supportive of financial assets like shares and property.   Stanlib Global Equity comment - Mar 14 Friday, 6 June 2014 Fund Manager Comment Market Background After their strong run last year, global equities made only modest progress over the quarter. Factors affecting investor sentiment included the Federal Reserve's first reductions in QE; a slide in emerging-market currencies; weaker-than expected Chinese and US economic data; and Russia's annexation of Crimea. Russia was among the worst-performing markets over the quarter, as investors weighed up the implications of economic sanctions imposed in retaliation for its move on Crimea. Chinese markets, too, performed badly. The HSBC China purchasing managers' index stayed below 50 (indicating contraction) throughout the quarter, while the central bank began serious efforts to stanch credit flows. Among developed markets, Japan was especially weak. Factors weighing on the Topix included disappointing fourth-quarter GDP, bad news on the country's trade and current-account deficits, and the sales-tax hike looming in April. US markets rose, as poor job-creation data was attributed to the unusually harsh winter rather than underlying weakness. Federal Reserve Chair Janet Yellen also caused a wobble mid-March by appearing to indicate that US interest rates could rise as early as next spring, but the panic was short-lived. The MSCI Europe index achieved a small positive return in local-currency terms, with the peripheral markets of Ireland, Italy and Portugal doing particularly well. Activity In consumer discretionary, we reduced Comcast Corp and bought Charter Communications (both US cable TV companies). We opened a significant position in Dutch life insurer Aegon, while exiting US firm Equifax (consumer credit reporting). We also opened positions in US biopharmaceutical Gilead and US industrial gases company Praxair. Performance The fund underperformed its benchmark in the first quarter. In terms of regional positioning, our overweight in Japan and underweight in Europe detracted, while our underweight in emerging markets added value. Stock selection was the primary cause of underperformance: strength in industrials was offset by a poor performance in financials, healthcare and consumer discretionary. Stock highlights included United Rentals, which rose after the company announced the acquisition of a speciality pump-rental company, National Pump. JPMorgan also outperformed as investors bought US banks, which are set to benefit from improving economic growth, credit growth and rising interest rates. Mazda Motor, Nomura Holdings, and house builder Sekisui Chemical were among Japanese underperformers during the quarter, as investors waited to gauge the impact of an imminent hike in the country's consumption tax. Outlook Recent market volatility and a sell-off in certain areas of the market has unsettled investors, while out of favour areas such as emerging markets are finding support. Economic data continues to improve, while commentators are divided on China. We remain of the view that investors can expect reasonable earnings growth in 2014, but less in the way of multiple re-rating. We believe that stocks broadly encapsulated by the "innovation driving growth", and "media content/cable" themes are attractive in the long term. We expect the earnings season to be a catalyst for a rebound, as fundamental strengths come to the fore.   Stanlib Global Equity comment - Sep 13 Thursday, 2 January 2014 Fund Manager Comment Market Background Global equity markets enjoyed a robust third quarter with the MSCI World Index up 8.3% in USD. This was despite a sizeable dip in August on growing fears that the US Federal Reserve would begin to wind down its programme of asset purchases at its September policy meeting. The Fed confounded expectations by leaving the rate of bond-buying unchanged, prompting a substantial rally across asset markets. Although US data was sufficiently mixed to persuade the Fed not to begin "tapering" in September, global economic news was generally positive. Data from Europe, China and Japan all showed a marked improvement. The relief rally was tempered in the last week of September by the ongoing political impasse over the US budget ceiling. This deadlock could have a negative effect on US GDP if Federal administrators shut down. In US dollar terms, the strongest performances came from Japan and from Europe. Overall, developed markets outperformed emerging markets; on a regional basis, Latin America underperformed, with Mexico producing a negative return for the quarter. Outlook Global equities are no longer cheap but are still reasonably priced. Although the prospect of tapering is clearly a potential headwind, the recovery in economic activity seen in the various regions of the globe should provide useful support. Furthermore, the M&A market has come to life recently, with some very substantial deals in telecom, IT and media sectors. The portfolio is positioned for economic improvement, with overweight positions in cyclical sectors, including consumer discretionary and technology. We find that companies in these sectors offer the most attractive combination of growth and valuation. We remain underweight energy, where oil majors are challenged, and defensive sectors generally.   Stanlib Global Equity comment - Jun 13 Friday, 20 September 2013 Fund Manager Comment Market Background Global equity markets ended the quarter approximately flat, with small gains in North America and Japan offset by weak performance in Asia and the emerging markets. Equities began the period on a positive note, helped by generally in-line Q1 earnings releases in the US. However, in May we saw the start of significant volatility in both equity and bond markets as investors began to price in the probability that the US Federal Reserve could start to 'taper' its quantitative easing (QE) program. The immediate impact included a spike in 10-year treasury yields, and weakness in major emerging market currencies and equity markets, as well as a sell-off of defensive and dividend-paying stocks, which had rallied strongly in March and April. Activity We initiated a new holding in a Japanese company Sekisui Chemicals, a prefabricated house-builder and plastic pipe manufacturer. We also bought Aeon, one of the largest diversified retailers in Japan. MasterCard was another new holding; the company is benefiting from structural growth in the electronics payment industry. Major sales included US diesel-engine manufacturer Cummins, following poor first-quarter results. Meanwhile, we locked in some profits by trimming our stakes in Japanese car manufacturer Toyota and US technology titan Microsoft. Performance The fund delivered positive returns and outperformed the index on a gross return basis over the quarter, largely as a result of positive regional and sector allocation. Our overweight position in the US and our underweight in emerging markets proved favourable, as did our overweight position in consumer discretionary and our underweight position in energy. Stock highlights included priceline.com, which continues to re-rate as investors grow increasingly comfortable with the company's competitive position and growth prospects, despite exposure to Europe. Toyota also performed well, benefiting from a weaker yen and strong car sales in the US. Kabel Deutschland rose after competing takeover bids from Vodafone and Liberty Global. Underperformers included Samsung, on concerns over the sustainability of the company's handset margins. Meanwhile, Marathon Petroleum declined as investors noted the narrowing of the WTI-Brent crude spread. First Quantum underperformed in tandem with a range of materials stocks, as the outlook for China deteriorated. Outlook The economic outlook is now particularly divergent, with the US and Japan improving while Asia, Europe and the emerging markets are challenged. Market volatility in response to central bank commentary surrounding QE seems a certainty in the months ahead; however, it remains our view that interest rates will remain relatively low for years to come, given the modest growth outlook. This should be supportive of equities and, as the economic recovery plays out, of more economically sensitive stocks. Given the underperformance of emerging markets, and our large underweight position, we will be looking to identify attractive opportunities in these countries.   Stanlib Global Equity comment - Mar 13 Thursday, 30 May 2013 Fund Manager Comment Market Background After the New Year uncertainty triggered by the ongoing debate over US budgetary pressures, the mood on US equity markets became more positive over the first quarter. Evidence suggesting that the economy may have bottomed out and that the outlook for corporate earnings growth was improving helped equities back to levels not seen since 2007. A series of solid earnings reports early in the year helped to reinforce this view, while the Federal Reserve pledged to continue with 'QE infinity' with the aim of achieving a meaningful reduction in the jobless rate. Later, signs of strain in the Eurozone, with a bailout for heavily-indebted Cyprus in March, were not enough to throw sentiment off course. However notable divergence emerged over the quarter between those countries on apparently strengthening trajectories, including the US and Japan, and those still struggling to gain momentum, including weaker members of the European periphery and some emerging markets. Equity markets in many of the latter - including Russia and Brazil - ended the quarter lower, impacted by moderating growth expectations and rising inflation. Activity We invested in the brewer Anheuser-Busch InBev. A recent fall in the former provided an attractive entry point for a high quality global consumer staple with a global portfolio of beer brands and strong pricing power. We sold Aetna early in the quarter on concerns that Obama care insurance exchanges will impact margins at the HMO.We also banked profits from the sale of Multiplan, the Brazilian shopping mall developer, and sold out of Itau Unibanco, the Brazilian bank, due to concerns about the Brazilian economy. Performance The fund delivered positive returns and outperformed the index on a gross return basis over the quarter. Stock selection, particularly in materials and consumer discretionary, added value. The refiner Marathon Petroleum outperformed. Marathon continues to benefit from low cost feedstock, and further broker upgrades saw the stocks at all-time highs. Amid signs of a pickup in US economic activity, the equipment rental company United Rentals and the industrial gas business Methanex contributed to performance. Underperformers included Riverbed Technology, after investors questioned the future of its core business; WLAN optimisation. Meanwhile, Sun Hung Kai - the property developer - was hurt by measures to cool the Chinese housing market. Outlook The global economic outlook is improving. However, the developed world in particular faces major challenges, both political and economic. The outcome of the Italian election and the Cypriot bailout highlight the difficulties facing the Eurozone, while significant challenges remain for US politicians to agree spending cuts. On a more positive note, US and Chinese economic data continue to strengthen while Japan is implementing significant measures to reawaken its economy from a decades-long slumber. Central banks around the world appear committed to maintaining extremely loose monetary policies, while stocks also offer good value despite the recent rally. Thus, while markets may experience volatility in the short term, we hold a positive view of longer-term prospects for equities.   Stanlib Global Equity comment - Dec 12 Wednesday, 29 May 2013 Fund Manager Comment Market Background Equity markets gained ground over the final quarter of 2012 as investors' appetite for risk was bolstered by signs that the recovery in the US economy is gaining momentum and an encouraging improvement in leading Chinese economic indicators. While the European economic background deteriorated, investors were encouraged by further measures to address the region's debt crisis and avert a break-up of the euro zone. Equity markets were also reassured by clear signs that the leading central banks remain committed to maintaining historically low interest rates and asset purchase programmes. European markets performed well as investors reacted favourably to a new debt relief package for Greece, while Japanese shares were bolstered by the election of new Liberal Democratic government and the prospect of a stimulus package for the economy. The smaller Asian markets reacted positively to encouraging Chinese economic data. Financials performed well, as did cyclical sectors such as industrials and basic materials on encouraging global economic indicators. Major US technology stocks were hit by weaker earnings announcements while relatively defensive areas such as utilities and telecoms underperformed. Activity The transition of the portfolio was completed in early November and with costs in line with the estimates provided by Citigroup ahead of the transition. We initiated a position in game maker Konami, which has several popular character franchises including the popular trading card game Yu-Gi-Oh, and is positioned for growth in social network gaming and in the evolving casino electronic game market. We also invested in the toolmaker Makita, which benefited from a weakening yen which makes the company more competitive in export markets. We banked profits from the sale of shares in Unilever and Itau Unibanco. Performance The fund delivered positive returns but underperformed the benchmark. Sector allocation added value but stock selection detracted. Stocks that added value included Samsung Electronics, which is enjoying robust for its smartphones and tablets. Meanwhile, Swatch, the watchmaker, should gain from the improving outlook for the Chinese economy, a key export market. In addition, Toyota benefited from the weaker yen. The largest negative contribution came from Tullow Oil - the energy business reported strong profits guidance but investors were disappointed by a lack of fresh drilling news. The share price of Fugro also fell sharply after the chairman resigned and the oil services company cut its full-year forecast Outlook We anticipated a deal to avoid the US going over the fiscal cliff risk and note the positive signs emerging from the Chinese economy, but believe that the relief rally is unlikely to be sustained given the headwinds facing the world economy. Given the mixed global economic outlook, we retain our cautiously optimistic overall bias. On a more positive note, some US economic surveys are increasingly reflecting the benefits of lower cost energy from the shale industry and the sustained recovery in the housing market. Given the mixed global economic outlook, we retain our cautiously optimistic overall bias. At the stock level, our focus remains on companies we believe offer sustainable competitive advantages and relatively attractive earnings growth prospects in the present low growth environment.   Stanlib Global Equity comment - Sep 12 Monday, 19 November 2012 Fund Manager Comment Markets Global equities moved higher through the third quarter of 2012. The MSCI AC World index rose 7.0% in US dollar terms, leaving it 13.4% higher year to date, and, with the extremely weak third quarter of 2011 dropping out of the 12 month comparison, now up 21.7% over the past 12 months. Looking just at the US market, this has been the fourth longest rally in the S&P 500 without a 5% correction since 2002. While central bank intervention is clearly playing a major part in driving sentiment, economic indicators are still, on average, coming in slightly ahead of expectations. In particular the US housing market appears to have bottomed, at least for now, with the widely followed S&P/Case-Shiller home price index now rising on a 12 month view. Clearly the removal of this powerful headwind for the US economy would be a bullish development even if there is unlikely to be a return to boom conditions. Of course the most important driver of markets over the coming month or so will be Q3 earnings reports. The last month or so has seen a further downward drift in expectations though the pace of decline has moderated, especially in Europe and in emerging markets. While Japan fell slightly, down 0.8%, all other regions rose, led by Asia which was ahead by 10.3%, followed by Europe which rose by 9.8%, emerging markets up 8.1%, the UK up 7.0%, and North America up 6.7%. Although the market advanced strongly through the quarter, sector performance was not wholly reflective of a wholesale "risk on" move. While electric utilities fell, so did steels; the only two sectors to do so. While life assurance, paper, banks, energy and miners were amongst the strongest sectors, so were household goods, food retailers and pharmaceuticals. From a market cap perspective the largest stocks still outperformed the smallest, though the gap (7.2% versus 6.7%) at least appears to be narrowing. Global market valuation levels are still modest by historic standards, with the world index now trading on 12.6 x consensus 2012 eps estimates, assuming a 5% rate of earnings growth for the year as a whole, an estimate which is down from the 6% assumption of one month ago. The consensus 13% growth estimate for 2013 has not changed from last month (though obviously the forecast level of earnings has come down slightly) which still does look rather optimistic at this stage. Even so a putative forward p/e multiple of 11.7x does leave a fair amount of room for disappointment. Fund Performance The fund rose by 5.2% in US Dollars in Q3 versus the 7.0% rise in the MSCI AC World Index. Effectiveness of our approach Poor stock selection in North America, notably in pharmaceuticals where Questcor fell sharply after Aetna limited coverage of its top-selling drug, and in IT, hurt relative performance through the quarter as well, at the margin, did the continuing outperformance of the largest stocks. We also suffered from the bounce in low quality European banks. Modestly positive stock selection in Japan was insufficient to offset the negative impact. Portfolio Positioning We have continued to increase exposure to Japan, with our position relative to benchmark now at its highest ever level. Though, needless to say, our holdings look nothing like the Japanese index with an emphasis on domestically focused companies. Our technology weighting has fallen somewhat, though we are still a little overweight, and we remain overweighted in high quality industrials where our weighting has slightly increased. We continue to underweight financials and expensive defensive names.   Stanlib Global Equity comment - Jun 12 Thursday, 23 August 2012 Fund Manager Comment Markets Global equities fell back over the second quarter of 2012. The MSCI AC World Index fell by 5.4% in US dollar terms following the extremely strong first quarter. The index is now up 6% for the year to date. Once again the travails of the Eurozone took centre stage driving markets sharply lower in May, though some recovery followed in June with markets rallying further at the very end of the month after it appeared that Germany had "given way" over the possibility of the European Stability Mechanism lending directly to troubled banks rather than only to governments. All regions fell led by emerging markets and continental Europe, down 9.1% and 8.8% respectively, closely followed by Japan down 7.3%. Asia, the UK and North America proved a little more defensive falling 4.6%, 4% and 3.4% respectively. There was a very clear "risk off" flavour to sector performance over the quarter on average, although there was a great deal of monthly volatility. The only sectors to offer a decent positive return were beverages, pharmaceuticals, telecoms, tobacco and real estate. Amongst the biggest losers were steels, miners, investment companies, electronics, and autos. At the aggregate level the market is torn between attractive valuation levels, especially relative to government bond yields, and continuing downward revisions to analysts' consensus corporate earnings forecasts for both this year and next. At the beginning of April just over 50% of all changes to forecasts were upgrades. Through the past quarter that number has fallen to around 35%. While the proportion of upgrades has fallen across all regions, the declines have been markedly less steep in Japan; perhaps Japanese analysts have become more used to disappointment! Across the sectors the biggest declines have been in financials though IT hardware has weakened more recently too. The current forward world p/e ratio stands at 11.8, assuming that the consensus 9% eps growth forecast holds. Fund Performance The fund fell by 7.5% in US Dollars in Q2 versus the 5.4% fall in the MSCI AC World Index. Effectiveness of our approach Investors' continuing preference both for larger companies (and especially the very largest) and for higher dividend yields particularly hurt our investment approach through the quarter. We also suffered from poor stock selection in the US with a number of our larger holdings suffering reversals against their previously positive trend. Portfolio Positioning Once again little has changed in terms of the overall shape of the portfolio this quarter. High quality and attractively valued industrial and technology stocks remain our largest overweight positions, versus our continuing underweighting of financials, and we are still finding our best ideas in North America. We remain close to benchmark weight in Japan and emerging markets, while continuing to avoid both continental Europe and the UK. However, over the quarter, we have added slightly to financials and to Europe at the expense of the US and technology.   Stanlib Global Equity comment - Mar 12 Friday, 1 June 2012 Fund Manager Comment Markets For those of us in the northern hemisphere, March is said to "come in like a lion, and go out like a lamb". This year, in terms of investors' more usual animal references, this month came in like a bear but later rallied strongly to end both month and quarter on a bullish note. The MSCI AC World Index rose by 0.7% in dollar terms in March, leaving it 12% ahead for the first quarter. Continuing better than expected economic data and a marked improvement through the month in the analyst upgrade:downgrade ratio across all markets contributed to the rally, as did ongoing central bank intervention to hold down long term interest rates. For the month, North America and Japan were the regional leaders, rising 2.6% and 1.4% respectively, while Asia and emerging markets lagged, falling 2.9% and 3.3% respectively. In sector terms the strongly "pro-cyclical" flavour of the first few weeks of the year appears to have reversed somewhat. Mining, steel, oil, construction materials and engineering were the laggards, while IT hardware, general retail, beverages, tobacco, leisure, health, software and pharma were the leaders. Of course we might just as well have written "Apple" in place of "IT hardware" as the largest company (by market cap) continued to power ahead, rising over 10% in March, and an extraordinary 48% in the first quarter. As of this week Apple's market cap sits at over $550 billion, while runner-up ExxonMobil has a market cap of $400 billion. Even so, Apple's weight in the index is only now approaching 2%. Needless to say this year's rally has taken valuations higher, but the world index is still trading on a not unreasonable 12.5 x 2012 consensus earnings assuming a growth rate of around 11%, a small acceleration from the 8% rate of growth seen in 2011. Fund Performance The Fund's "A" shares rose by 1.5% in US Dollars in March, 0.8% ahead of the 0.7% return from the MSCI AC World Index. This year so far the fund has returned 11.5% versus 12.0% from the index. Effectiveness of our approach The theme of the first quarter has very clearly been to buy "last year's losers", irrespective of any fundamental support which might or (in this instance) might not be coming from analysts' earnings revisions. While this has been a clear headwind for our approach, this month we benefited from modestly positive stock selection across all regions and most sectors with the exception of financials. History and our own experience both strongly suggest that as the "exuberant" stage of the rally comes to an end that investors will refocus on relative company fundamentals and that our approach will add considerable value as this occurs. Portfolio Positioning Little has changed from a "big picture" perspective this month. Technology and consumer stocks remain our largest overweight positions and we are still finding good ideas in North America. We are close to benchmark weight in Japan - though our Japanese stocks look nothing like the typical Japanese company - and in emerging markets while we still find far less to attract us in Europe and in financials.   Stanlib Global Equity comment - Dec 11 Tuesday, 20 March 2012 Fund Manager Comment Markets After the roller coaster ride of the preceding eleven months, global equity markets ended the year with somewhat of a whimper. The MSCI AC World index fell by just 0.2% in US dollar terms, ending the year down 6.9%. Although there was not an enormous variation in regional performance, relative performance reflected that of the rest of the year with Europe and emerging markets continuing to lag. For the year as a whole North American equities really stood out, managing to eke out a gain of 0.5%. All other regions fell with the UK down 2.6%, Asia -12.5%, Japan -14.2%, Europe -14.7% and emerging markets -18.5%. Industry performance was quite varied, with something of a "risk off" flavour - pharmaceuticals and tobacco performing well, steel and mining badly - though at the same time banks managed a small relative gain while the normally more defensive software sector underperformed. Defensiveness was certainly the theme of the year as a whole. Tobacco stocks rose by an extraordinary 32%, far outpacing the runner-up, pharmaceuticals, which rose by 13%. At the bottom end came the deep cyclical steel and mining sectors which fell by 35% and 27% respectively, closely followed by the financials, with investment companies, banks and life assurers falling by 23%, 22% and 20% respectively. While equity prices fell, corporate earnings rose through 2011, with the current consensus estimate standing at around 11%. If this does turn out to be the case, global markets ended 2011 on a trailing p/e ratio of 12, well below its long run average and appearing somewhat anomalously low when compared with the current level of bond yields. Although estimates for 2012 have continued to come down, analysts are still looking for a repeat performance of +11% for corporate profits growth in 2012, which would place global equities on a prospective P/E ratio of 11x. A level, which clearly reflects the uncertainty, which faces investors as we enter the New Year. Fund Performance The Fund's "A" shares fell by 1.6% in US Dollars in December, 1.4% behind the -0.2% return from the MSCI AC World Index. For the year as a whole the fund returned -7.5% versus the benchmark return of -6.5% Effectiveness of our approach Our "equal opportunity" approach - that of picking the best ideas without regard to the benchmark - suffered in December as it did for most of the year from the significant outperformance of the very largest stocks, of which there are (by definition) relatively few and thus to which we will tend to be underexposed. The top 20% of global market capitalisation is accounted for by just 34 stocks whose size ranges from $99bn upwards. This month this group of stocks returned +3%, while all four other market cap quintiles fell. For the year as a whole this group rose 2.8% versus the index fall of nearly 7%. Portfolio Positioning The overall shape of the portfolio has not changed a great deal over the past quarter although there has been some further reduction in industrial and financial exposure in favour of consumers and technology. Our largest regional position remains our overweighting of North America, and we are now for the first time overweight Japan, while we remain underweight in Europe and the UK and, as has been the case for several years, we continue to avoid most financial stock.   Stanlib Global Equity comment - Sep 11 Friday, 23 December 2011 Fund Manager Comment Markets After rising for four consecutive quarters, the MSCI World Index slid sharply in the third quarter of the year. Standard & Poor's downgrade of the US' long-term AAA credit rating undermined investor confidence and led to a significant sell-off in equity markets. Moreover, an agreement by eurozone leaders to expand the role of the European Financial Stability Facility and provide a second bailout for Greece failed to address investor concerns regarding the debt crisis. This coupled with inflationary pressures and evidence of slowing global economic growth further dampened sentiment. All regions ended lower, with Europe ex-UK declining the most, followed by emerging markets, Pacific ex-Japan, the UK, the US and Japan. Meanwhile, defensive stocks such as consumer staples and utilities fell the least, benefiting from investors' risk aversion over the period. Returns in US dollar terms were hurt by its strength against the euro and sterling. Looking ahead, equity valuations are fair and any action to restore confidence in the eurozone or substantial monetary easing could support performance. Fund Performance The fund underperformed its benchmark over the quarter largely on account of stock picking in the US segment. Security selection in Pacific ex Japan and Japan also hampered performance. However, this was partially mitigated by stock picking in Europe ex UK. In terms of tactical asset allocation, an underweight stance in Europe (including UK) proved beneficial, whilst the bias towards emerging markets detracted from returns. US positions were detrimental to performance Holdings in selected energy companies declined following lowered shipment and production forecasts. The sector lagged on concerns over sluggish demand amid slowing economic growth. Positions in financials hurt returns, as did the below benchmark exposure to health care stocks such as Johnson & Johnson. Pacific ex Japan holdings weakened returns Shares in real estate firms hurt performance as stock prices tumbled amid fears that property sales in China will weaken this year on account of an increasingly severe credit outlook. Moreover, not holding certain stocks in the defensive telecommunications and utility sectors hampered returns. Positions in Europe ex UK added value Selected capital goods companies and positions in food and staples retail firms added value. Notably, a holding in Morrison Supermarkets, which has been gaining market share in the UK, was beneficial to performance. Not holding banks such as Unicredit also helped returns.   Merger Thursday, 6 October 2011 Official Announcement The following funds merged with the Stanlib Global Equity fund, effective 29/09/2011: Stanlib Offshore Australia Fund Stanlib Offshore Technology Fund Stanlib Offshore Telecommunications Fund Stanlib Offshore Japan Fund Stanlib Offshore Global Focus Fund   Stanlib Global Equity comment - Jun 11 Monday, 19 September 2011 Fund Manager Comment Markets Equity markets moved broadly sideways through the second quarter, with a very strong rally in the fi nal week of the month tipping the score into positive territory. The MSCI World Index rose by 0.7% in US dollar terms, leaving it up 5.6% for 2011 so far. There was very low regional dispersion of returns with (perhaps unexpectedly) continental Europe performing best with a rise of 3% while emerging markets lagged with a decline of 1%. From a sector perspective, in very broad terms cyclically sensitive areas tended to underperform, led on the downside by (inter alia) steel, energy and mining, while pharmaceuticals and foods led on the upside. While the travails of the Eurozone continued to dominate the headlines, the specifi c impact of European news fl ow was, as regional performances suggest, less easy to discern in the markets, save perhaps for the monthend rally which coincided with a supposed "deal" agreed between EU governments and Greece's creditors together with the passing of the next round of austerity measures in the Greek parliament. Even so it is probably just as plausible to attribute the end-quarter rally to a technical rally as much as to anything especially fundamental. Certainly one of the more encouraging features of the year has been investor willingness to see the world as a glass half-empty rather than half-full, suggesting that there is plenty of cash still on the sidelines. Indeed, with US equity mutual fund outfl ows continuing at a hefty pace, it is diffi cult to describe sentiment as anything other than cautious - a good sign! Given that equity valuations appear reasonable - the world p/e ratio for 2011 is below 13x - there remains scope for any positive economic and/or earnings surprises to be taken very positively by the market. We shall see what earnings season brings us. Fund Performance The Fund's "A" shares rose by 3.8% in US Dollars in Q2, beating the 0.7% return from the MSCI World Index. On a 12 month basis the Fund is 11.7% ahead of the index. Effectiveness of our approach Strong stock selection, especially in North America and across all sectors drove our outperformance in Q2. Investors continue to focus on high-quality, highly profi table companies with strong earnings revisions, which of course is our own investment approach. Portfolio Positioning The overall shape of the portfolio has once again not changed markedly over the past quarter. We continue to favour emerging markets, especially relative to continental Europe and the UK. Our sector and industry positions also remain largely unchanged. IT and high quality industrial cyclical sectors continue to provide us with the best ideas while we struggle to fi nd many good ideas amongst the world's major banks.   Stanlib Global Equity comment - Mar 11 Tuesday, 14 June 2011 Fund Manager Comment Markets Global equity markets ended 2010 on a strongly positive note. The MSCI World Index rose 9.1% in US dollar terms in the fi nal quarter taking the return for the year as a whole to 12.3%. Japan and North America led the rally, rising by 12% and 11% respectively, while continental Europe lagged, rising 4%, and thus just managing to put in a positive return for the year of 2.4%. (Though the EMU/Euro member countries within Europe actually fell 3.4% over the year.) Other than lagging Europe, most regional returns were notably close to each other for the year. Emerging markets rose by 19.2%, Asia ex-Japan 17.1%, North America 16% and Japan by 15.6%. The UK was stuck halfway between the leaders and laggards at 8.8%. All industry groups rose through the quarter. Cyclicals such as mining, engineering, energy, chemicals and autos led the way, while banks lagged along with the more defensive pharmaceutical and telecom sectors. 2010 also ends on a positive economic note, with data releases on balance continuing to surprise to the upside and analysts continuing to upgrade corporate earnings expectations for 2011. The analysts' consensus is now for a 16% rise in earnings next year, following this year's impressive 44%. This puts world markets on a trailing price/earnings ratio of under 15, and a forward ratio of around 12.5. While not therefore at unreasonable valuations, the key questions for 2011 remain how markets might react were global interest rates and bond yields fi nally to rise to more normal levels, how much further the authorities in emerging markets might tighten policy (most obviously in China), and how the problems of the Eurozone will develop. Fund Performance The Fund's "A" shares rose by 10.1% in US Dollars in the quarter, compared to the MSCI World Index which rose by 9.1%. For 2010 as a whole the fund rose by 15.1%, 2.8% ahead of the index return of 12.3%. Effectiveness of our approach 2010 as a whole has seen something of the "return to rationality" which we both expected and hoped would occur, with investors focussing on underlying company profi tability and rewarding those companies whose prospects were improving the fastest. An interesting aspect of 2010 was perhaps the historically low spread of returns across companies, with the best outperforming the worst by a smaller than average margin. As the "easy" earnings growth is likely to be behind us, we might expect this gap to be wider in 2011, hopefully to our advantage. Portfolio Positioning Once again over the last quarter we have made only small changes to the portfolio's overall geographic and sectoral positioning. Technology and emerging markets remain our key overweights, along with an increasing industrial exposure, while we still struggle to fi nd attractive names in the fi nancial sector   Stanlib Global Equity comment - Dec 10 Friday, 25 February 2011 Fund Manager Comment Markets Global equity markets ended 2010 on a strongly positive note. The MSCI World Index rose 9.1% in US dollar terms in the fi nal quarter taking the return for the year as a whole to 12.3%. Japan and North America led the rally, rising by 12% and 11% respectively, while continental Europe lagged, rising 4%, and thus just managing to put in a positive return for the year of 2.4%. (Though the EMU/Euro member countries within Europe actually fell 3.4% over the year.) Other than lagging Europe, most regional returns were notably close to each other for the year. Emerging markets rose by 19.2%, Asia ex-Japan 17.1%, North America 16% and Japan by 15.6%. The UK was stuck halfway between the leaders and laggards at 8.8%. All industry groups rose through the quarter. Cyclicals such as mining, engineering, energy, chemicals and autos led the way, while banks lagged along with the more defensive pharmaceutical and telecom sectors. 2010 also ends on a positive economic note, with data releases on balance continuing to surprise to the upside and analysts continuing to upgrade corporate earnings expectations for 2011. The analysts' consensus is now for a 16% rise in earnings next year, following this year's impressive 44%. This puts world markets on a trailing price/earnings ratio of under 15, and a forward ratio of around 12.5. While not therefore at unreasonable valuations, the key questions for 2011 remain how markets might react were global interest rates and bond yields fi nally to rise to more normal levels, how much further the authorities in emerging markets might tighten policy (most obviously in China), and how the problems of the Eurozone will develop. Fund Performance The Fund's "A" shares rose by 10.1% in US Dollars in the quarter, compared to the MSCI World Index which rose by 9.1%. For 2010 as a whole the fund rose by 15.1%, 2.8% ahead of the index return of 12.3%. Effectiveness of our approach 2010 as a whole has seen something of the "return to rationality" which we both expected and hoped would occur, with investors focussing on underlying company profitability and rewarding those companies whose prospects were improving the fastest. An interesting aspect of 2010 was perhaps the historically low spread of returns across companies, with the best outperforming the worst by a smaller than average margin. As the "easy" earnings growth is likely to be behind us, we might expect this gap to be wider in 2011, hopefully to our advantage. Portfolio Positioning Once again over the last quarter we have made only small changes to the portfolio's overall geographic and sectoral positioning. Technology and emerging markets remain our key overweights, along with an increasing industrial exposure, while we still struggle to fi nd attractive names in the financial sector.   Stanlib Global Equity comment - Sep 10 Wednesday, 5 January 2011 Fund Manager Comment Markets Global equity markets rose sharply in September. The MSCI World Index rose 9.4% in US dollar terms, its strongest monthly gain since April 2009, early in the market rally, and its 9th strongest month on record. Asia, emerging markets and continental Europe were the regional leaders with solid double-digit gains, while Japan was the notable laggard as continuing upward pressure on the Yen raised further deflationary fears for the Japanese economy. Sector leadership was with the cyclicals: household goods, engineering, autos, mining and IT hardware. Defensive sectors such as food producers and utilities were the laggards, though no sector failed to generate a positive return. Banks and other financials were also amongst the laggards. It is actually quite difficult to know exactly how to explain September's strong gains. Economic data releases were on balance in line with expectations, and analysts have if anything been cautious about raising estimates ahead of third quarter announcements. Perhaps a technical explanation would be more accurate in this case. At the start of the month markets appeared oversold, having fallen back quite sharply in August, while investor sentiment surveys were at that point close to bearish lows. Against a background of attractive valuations (below 13x 2010 earnings) and continuing loose monetary policy with strong hints of a second dose of quantitative easing ahead, it therefore did not take much fundamental news to spark a rally. While the rise in prices has obviously taken valuations higher, at still below 14x 2010 and around 12x 2011 consensus earnings, global equity markets are not obviously expensive. Meanwhile from a technical perspective the world index has broken above both the highs of two months ago and the key 200-day moving average, both positive signals. Fund Performance The Fund's "A" shares rose by 11.5% in US Dollars in September, compared to the MSCI World Index return of 9.4%. On a 12 month view the fund is now 1.4% ahead of the benchmark. Effectiveness of our approach With aggregate earnings upgrades having stalled, investor attention has been drawn more clearly to those companies whose estimates are still being raised. By the same token, investors have also been attracted by companies with the strongest profitability and high expected future growth. We regard both of these developments as part of what we have previously described as the market's return to "rationality" - a return which clearly suits our own investment approach. Portfolio Positioning As has been the case for some time, we have made only small changes to the portfolio's overall geographic and sectoral positioning through September. Technology and emerging markets remain our key overweights, while we struggle to fi nd attractive names in the financial sector. The new Basle rules on capital adequacy, while being introduced only slowly, will have the inevitable (and intended) consequence of reducing bank leverage and thus potential future return on equity, certainly relative to their extraordinarily high pre-crisis levels.   Stanlib Global Equity comment - Jun 10 Thursday, 9 September 2010 Fund Manager Comment Market Global equity markets as measured by the MSCI World index fell by 3.4% in US dollar terms in June, continuing the weak trend which saw the index fall by over 10% through the second quarter. Emerging markets, where investors remain more confident of continuing growth, held up relatively well, as did developed Asia and (for once) continental Europe, while the US, Japan and the UK were hit hardest. Defensive sectors such as food producers, tobacco, pharmaceuticals and telecom utilities managed to eke out a small advance, while technology, retailers, oils and miners saw some of the larger declines. As we noted last month, market fears for the future have not yet been reflected in any noticeable downgrading of earnings growth estimates for 2010 or 2011. The half year reporting season, due to kick off in the second week of July, may well prove critical in setting the tone for global equity markets for the second half of the year. Meanwhile it appears that the technical and fundamental positions of world markets have now swapped places relative to how they appeared at the start of the year, with technical weakness somewhat offset by much better value, with the global p/e ratio for 2010 currently around 13. Fund Performance The Fund's "A" shares declined by 3.2% in US Dollars in June, compared to the MSCI World Index return of -3.4%. Effectiveness of our approach Although markets remain quite volatile with as yet no return to stable leadership, the speculation of much of last year has given way to a greater focus on those characteristics which drive share price performance over the long term: shareholder wealth creation, relative valuation and relative earnings revisions. In this sense, despite the volatility, the market environment appears to be returning to what we regard as normality. As a result, while we are lagging the index somewhat on a 12 month view, we are in line so far in 2010, and ahead over the last quarter. Portfolio Positioning The two key relative positions which we have taken over the past 18 months remain in place. A large number of technology names continue to exhibit high profitability, attractive valuations and relative strength in both business and price momentum. On the other hand, financial stocks, and especially banks, appear especially unattractive, with what appeared to be a nascent recovery now once again rolling over, especially and most obviously in Europe. Our regional biases are also broadly unchanged. Growth, earnings and price leadership remains with the emerging markets, while we continue to find little to attract us in Europe or Japan.   Fund Name Changed Thursday, 22 July 2010 Official Announcement The STANLIB Offshore International Fund will change it's name to STANLIB Global Equity Fund, effective from 22 July 2010   Stanlib International comment - Mar 10 Tuesday, 29 June 2010 Fund Manager Comment Market The first quarter of 2010 started shakily but ended strongly (March's performance was the strongest since July 2009) leaving the MSCI World Index with a gain of 3.4%. Japan, having lagged the recent rally quite significantly, was the strongest gainer, rising 8%, while Europe was the only region which fell over the quarter (down just over 2%) as a result of the well-publicised fiscal problems of the smaller members of the Eurozone. Cyclical consumer sectors such as retailers and cyclical industrial and basic materials sectors were the clear leaders, while pharmaceuticals, telecoms, oils and utilities were the laggards. While global markets appear in great shape from a technical perspective, valuations are beginning to reach less attractive levels. The world is currently trading at 19 x 2009 earnings and even with consensus forecasts looking for growth of 33% in 2010 that still leaves the forward global p/e ratio at 14. The next challenge for markets, assuming there is no "double-dip", will be the eventual ending of currently super-easy monetary conditions as the Federal Reserve and other central banks face up to the prospect of having to return interest rates to more normal levels. Fund Performance The Fund's "A" shares rose by 1.6% in US dollars in the first quarter of 2010, compared to the MSCI World Index return of 3.4%. Effectiveness of our approach The last twelve months saw investors embrace the riskiest equities: those with lowest quality earnings, highest leverage, and the greatest sensitivity to economic and financial stabilisation, even though such companies were not, until more recently, experiencing superior (or even any) earnings upgrades. Our approach therefore struggled through much of this period. More recently however, although still with some volatility as in January, the market appears to be beginning to return to what we regard as rationality. With valuation parameters across sectors at unusually close levels, from this point we believe that investors are likely to reward undervalued quality and pay increasing attention to earnings revisions, in other words the kind of normal market environment of which our investment approach is designed to take advantage. Portfolio Positioning Overall, the geographic and sectoral shape of the portfolio remains very stable. Our major regional positioning remains an overweighting of emerging markets, where we can still find good quality companies with great earnings and price momentum at reasonable value, at the expense of Europe and Japan. In sector terms we remain very enthusiastic about the prospects of a large number of technology stocks, as well as many very high quality pharmaceutical stocks which appear quite exceptionally undervalued. On the flipside we are still finding very few financial stocks which match our criteria.   Stanlib International comment - Dec 09 Friday, 19 March 2010 Fund Manager Comment I manage the fund with a top-down approach where I aim to add value both via tactical asset allocation in terms of regional deviations from the benchmark and via manager selection within Fidelity. This approach complements the bottom-up stock picking of the selected underlying managers and performance comes from my decisions as well as from security selection. I did not change my tactical asset allocation as well as manager selection over the quarter. Tactical asset allocation retained I maintained my regional weightings versus benchmark, with a preference for developing over developed regions. I have a bias towards Asia ex Japan and emerging markets vis-a-vis the US and Europe. I remain neutral on Japan. I believe Asia ex Japan and emerging markets can benefit from the current global economic ecovery, and offer better returns in a global equity portfolio. Conversely, the US tends to be a defensive area in risk-averse environments, and might underperform in market rallies. No changes in manager selection I am happy with the manager selection in place, as the objective is to have a global equity exposure with a lower volatility than a singlemanager approach. The current mix is well diversified with managers that are lowly correlated to each other on account of their different investment styles.   Stanlib International comment - Sep 09 Monday, 30 November 2009 Fund Manager Comment The fund generated robust positive returns, but underperformed its benchmark over the quarter, mainly due to stock selection in the European segment of the portfolio. Here, relatively low exposure to banks, which generated strong returns, undermined performance. Stock picking in diversified financials, notably a position in Deutsche Boerse, which was negatively impacted by concerns about falling volumes and higher costs, also hampered returns. Security selection in other regional segments, however, added value. Notably, in the US, stock picking in energy firms was beneficial. A position in Anadarko benefited from news of a new oil discovery, while an underweight stance in Exxon Mobil added value, as its share price fell after a sizeable drop in second quarter earnings and a number of plant closures. Asset allocation decisions also proved rewarding. A bias towards European equities at the expense of the UK contributed, as did an overweight stance in Pacific ex Japan.   Stanlib International comment - Jun 09 Friday, 18 September 2009 Fund Manager Comment The fund outperformed its benchmark over the period, mainly due to stock selection in the US and Japanese segments of the portfolio. In the former, positions in technology hardware and equipment firms, notably Brocade Communications, added value. Its quarterly results surpassed estimates and it gained more market share from its rival Cisco. In the Japanese portion, lack of exposure to the defensive utilities sector was rewarding. Electric power and gas firms lagged as risk appetite improved. Conversely, an underweight stance in banks, which performed strongly over the quarter, detracted from returns of the European segment. Stock picking in the Pacific ex Japan and emerging market portions also proved unfavourable. Asset allocation contributed to relative returns. In particular, an overweight stance towards Pacific ex Japan and emerging markets added value. However, the impact was partially counteracted by the bias towards Continental Europe at the expense of UK equities.   Stanlib International comment - Dec 08 Wednesday, 25 March 2009 Fund Manager Comment Positions in banks detracted from the performance of the European segment of the portfolio due to continued concerns about their capital adequacy. Moreover, falling oil prices hurt returns from energy stocks. In the Japanese portion, lack of exposure to defensive electric power utilities hurt returns, as did positions in export orientated firms. Conversely, stock picking in the US and Pacific ex-Japan was beneficial. In the former, low exposure to prominent diversified financials supported relative returns, while in the latter, an overweight stance in defensive sectors like telecommunications was rewarding. Asset allocation decisions added value over the quarter. I maintained the portfolio's bias towards the eurozone at the expense of the UK, which proved helpful. An underweight in the US also supported performance. However, this was partially offset by off-benchmark holdings in Emerging Markets.   Stanlib International comment - Sep 08 Friday, 14 November 2008 Fund Manager Comment Over the period, the fund under performed its benchmark amid heightened volatility in equity markets. The underperformance was due largely to stock selection in the US and European segments of the portfolio. Here, positions in materials and energy stocks detracted from returns, as prices of several commodities, including oil, chemicals and metals, fell in light of a deteriorating outlook for global demand. Holdings in capital goods firms were also hampered by expectations of weakening economic activity and a more challenging pricing environment. Moreover, in the European segment, a relatively low exposure to food & beverage stocks hurt performance because investors favoured companies less likely to be impacted by the economic slowdown. In terms of asset allocation, a bias towards European equities and an off-benchmark exposure to Emerging Markets inhibited returns, as did an underweight position in the defensive US market. In contrast, below-benchmark holdings in the UK added value.   Stanlib International comment - Jun 08 Monday, 22 September 2008 Fund Manager Comment The fund outperformed its benchmark over the period and was ranked in the first quartile of its peer group in terms of performance. Stock selection in the European and US portions of the portfolio was particularly beneficial to returns. A cautious stance towards banks, which continued to report losses due to their exposure to risky assets, boosted returns from both the regional sub-portfolios. Positions in chemicals firms were also rewarding. The requirement for better yields from agricultural land and increased crop plantation for bio-fuels drove demand for fertilisers. This, coupled with a tight supply situation, supported agrochemicals holdings. Moreover, in the US portion, positions in oil-drilling firms, which benefited from higher demand for rigs, buoyed performance. In terms of asset allocation, a bias towards Europe at the expense of the UK detracted, as the former under performed other markets over the quarter. An underweight in the US also hurt relative returns.   Stanlib International comment - Mar 08 Friday, 11 July 2008 Fund Manager Comment Fund selection hurt returns, with the US segment proving particularly detrimental. Four of the five US holdings underperformed their benchmarks. Here, positions in the capital goods and technology hardware & equipment sectors undermined performance in light of concerns over a slowdown in economic activity. Elsewhere, investments in capital goods firms and in diversified financials, whose revenue forecasts were downgraded, hurt the returns of the South East Asia Fund. The contribution of asset allocation was mixed. An above-index exposure to Continental Europe and an underweight in the UK proved rewarding, while an off-benchmark position in Emerging Markets and an overweight in Asia ex Japan hurt returns, since these regions underperformed the rest of the world.   Stanlib International comment - Dec 07 Thursday, 6 March 2008 Fund Manager Comment "Asset allocation contributed to relative returns. The fund's above-benchmark holding in continental European equities proved rewarding, as market performance was supported by relatively positive third-quarter earnings releases and renewed M&A activity. Exposure to the Emerging Markets was also favourable, as they outperformed other bourses over the quarter. Stock selection was also beneficial to relative returns. In particular, the fund's US holdings added value. Here, positions in fertilizer companies were boosted by improved profit forecasts. Holdings in technology hardware and equipment firms also aided performance, as did a relatively low exposure to diversified financials. Conversely, investments in electrical machinery and wholesale-trade firms did not help relative returns of the Japanese portfolios."   Stanlib International comment - Sep 07 Tuesday, 27 November 2007 Fund Manager Comment The fund outperformed its benchmark over the review period. Asset allocation contributed to returns during the quarter. The overweight positions in Europe ex-UK, Asia ex-Japan and Emerging Markets, proved beneficial especially in July and September. The underweight position in the US also helped relative returns in July and September, while it was less supportive in August. The underweight UK position aided relative returns throughout the quarter. Japan is a neutral position. Stock selection was also beneficial. In the European portion of the portfolio, holdings among materials stocks contributed to performance. In particular, the holdings in steel manufacturer ArcelorMittal gained from strong demand and higher prices for steel. Positions in the Asia Pacific segment also generated strong returns. For example, holdings in China Merchants Bank, which has significant exposure to the growing retail segment in China, proved beneficial.   Stanlib International comment - Jun 07 Tuesday, 25 September 2007 Fund Manager Comment During the quarter, the fund outperformed its benchmark. Asset allocation contributed to returns. The fund's bias towards Continental European equities proved rewarding, as the region's earnings momentum remained healthy. The exposure to Emerging Markets, which traditionally outperform against a backdrop of improving global growth, also enhanced returns. Conversely, the below-benchmark exposure to UK quities proved detrimental. The strong performance of the North American portion of the portfolio was beneficial to returns. In particular, the strength of holdings in the chemicals and construction & engineering sectors boosted performance. Positions in the Asia Pacific segment also contributed. Here, investments in China Merchants Bank proved beneficial, after the bank reported strong earnings figures. Meanwhile, the holding in the Global Property Fund detracted amid expectations of higher interest rates.   Stanlib International comment - Mar 07 Thursday, 24 May 2007 Fund Manager Comment The fund outperformed its benchmark during the review period. Asset allocation contributed to returns during the quarter. The fund's bias towards Continental European equities proved particularly rewarding, as the region's stocks were supported by M&A activity and upbeat corporate results. A relative lack of exposure to US stocks, which underperformed during the period, also boosted returns. A bias towards the Asia Pacific markets was also advantageous, as strong domestic demand helped buoy stock prices. Security selection in the US was the most beneficial to performance, with four of the five underlying funds outperforming their benchmarks. Holdings among oil refiners profited from strong demand and healthy refining margins. Stock picking also proved productive in the European segment. Conversely, in the Japanese component of the fund, investments in export dependent electrical machinery manufacturing firms detracted from returns, as a strengthening yen weighed on sentiment.   Stanlib International comment - Sep 06 Monday, 26 March 2007 Fund Manager Comment During the quarter, the fund returned 1.4% in US dollar terms, underperforming its benchmark index, which returned 4.5% over the same period. In terms of asset allocation, a positive stance towards the markets of Europe and the Asia Pacific region proved rewarding. However, this was counteracted by the portfolio's comparative lack of exposure to US equities, in light of their relative outperformance this quarter. Stock selection in the US component of the portfolio, which accounts for more than 40% of the fund's assets, proved the most detrimental influence on aggregate performance. Here, the weakness of the underlying funds' positions in the oil refining, airlines and metals & mining sectors was especially detrimental. The European component of the fund also undermined overall returns, with the negative influence of holdings in smaller companies proving noteworthy. Exposure to gaming stocks was also significantly counterproductive after a US ban on online gambling gave rise to fears of greater regulation in the European Union   Stanlib International comment - Dec 06 Monday, 26 March 2007 Fund Manager Comment During the quarter, the fund returned 8.4% in US dollar terms, in line with its benchmark index, which also returned 8.4% over the same period. Asset allocation made a significant contribution to returns. The fund's bias towards Continental European equities proved particularly rewarding, as did an underweight position in US markets. However, this was partially counteracted by a relative lack of exposure to UK equities. Stock selection in the Japanese component of the portfolio proved the most detrimental influence on aggregate performance, with two of the three underlying funds underperforming their benchmark indices. Here, the weakness of holdings in the banking sector was a common theme. In the UK segment, exposure to gaming stocks eroded returns, following a US ban on online gambling. Conversely, European investments had a positive impact on performance, particularly holdings in banks, media firms and food manufacturers. Stock picking also proved beneficial in the Asia Pacific (ex Japan) component of the fund.   Stanlib International comment - Jun 06 Tuesday, 28 November 2006 Fund Manager Comment During the quarter, the fund returned -3.1% in US dollar terms, underperforming the benchmark index, which returned - 0.5% over the same period. Stock selection and asset allocation both detracted from returns this quarter as investors, ignoring underlying fundamentals, sold indiscriminately. Stock selection in the fund's US component, which accounts for over 40% of the fund's assets, detracted the most. Holdings in the healthcare equipment & services and consumer durables sectors proved particularly disappointing. The performance of the Japanese segment, which had limited exposure to defensive sectors, also hurt returns. Although the holding in the Japan Smaller Companies Fund was trimmed over the quarter, the residual position proved counterproductive. The key detractor in terms of asset allocation was the underweight exposure to the UK market, which outperformed as a result of the defensive nature of some of its key constituents. This was partially offset by the fund's overweight position in Continental Europe, which proved beneficial in light of the resilience of regional stocks.   Stanlib International comment - Mar 06 Friday, 25 August 2006 Fund Manager Comment Aggregate performance was bolstered by particularly rewarding security selection in the US, which was complemented by sound stock picking in the markets of continental Europe, the UK and the Pacific (ex Japan) region. Conversely, the choice of individual holdings in the underlying Japanese portfolios detracted from returns. From a global perspective, security selection was beneficial across much of the capitalisation scale. On a global sector basis, stock picking amongst capital goods and materials businesses enhanced returns. However, this was partially offset by the weakness of holdings in the health care and technology hardware sectors. The fund's performance was boosted by its overweight exposure to the energy sector as refining stocks attracted renewed investor support following a disappointing fourth quarter. The manager maintained the fund's underweight exposure to US equities throughout the period. Although the macroeconomic backdrop remained sound, he continued to believe that better investment opportunities could be found in markets where the associated economies were at a less advanced stage in their economic and monetarytightening cycles. At the same time, the portfolio's overweight exposure to continental European markets was maintained. Conservative GDP forecasts for some of the larger economies, especially Germany, suggest that eurozone growth could surprise on the upside in the months ahead. Meanwhile, a comparatively soft UK economy continued to imply that a moderately underweight stance towards this market was warranted. Elsewhere, the manager continued to favour the markets of Japan and the neighbouring Asia Pacific region. Japan remains on a firm growth trajectory while continued Chinese economic expansion should provide upward momentum across the subcontinent.   Standard Bank International comment - Sep 05 Tuesday, 20 December 2005 Fund Manager Comment During the quarter, stock selection within the US portion of the fund was the largest contributor to returns. Stock picking amongst European and UK companies also proved positive. Stock selection in South East Asia was broadly neutral, while stock picking amongst Japanese companies detracted from returns. Returns were boosted by individual holdings in the energy, banks and diversified financial sectors, while overweight exposure to the energy and capital goods sectors proved beneficial. Valero Energy was the largest single contributor; the independent oil refiner was boosted by strong demand for oil refining at a time when capacity has been limited. Selected stocks within the consumer sector - notably homebuilders - performed disappointingly as investors became increasingly concerned about their future earnings prospects in an environment of mixed economic data. Although the fund remained underweight the US relative to the benchmark index, US economic indicators are, on the whole, encouraging. Business confidence seems resilient, and strong corporate balance sheets also offer potential for corporate growth. The fund's exposure to the UK was increased. Investors are hopeful that the current economic slowdown will prove temporary and that, in spite of inflationary concerns, interest rates will be cut further to allow consumer spending to recover. The fund remained overweight Europe. The economic outlook for Europe remains mixed, and peripheral economies continue to prosper. Although the larger economies remain weak, signs - such as rising company earnings - are encouraging. Meanwhile, the portfolio's overweight exposure to Japan was increased. Investors will be seeking confirmation that Japanese growth is sustainable following impressive share-price gains in the third quarter.   Standard Bank International comment - Jun 05 Thursday, 17 November 2005 Fund Manager Comment During the quarter, stock selection within the US was the largest contributor to performance. Holdings in Europe, Japan, emerging markets and South East Asia were also positive, whereas stock selection in the UK was negative. On a global sector basis, exposure to energy, consumer durables & apparel and telecommunication services companies added value. Stock picking among medium-sized companies proved very beneficial. The fund's holding in Nextel Communications was the largest single contributor to returns. The fund's exposure to a number of homebuilders boosted performance, as rising house prices and levels of sales are being fuelled by low mortgage rates and increasing employment. Valero Energy continued to perform well, due principally to the high oil price. The portfolio manager maintained the fund's underweight exposure to the US relative to the benchmark index. The fund's underweight exposure to UK equities and overweight exposure to Japanese equities were both reduced. The portfolio manager increased the fund's overweight position in Europe. Although the US economy remains one of the strongest among the developed markets, with a buoyant housing market underpinned by healthy jobs growth, it is very difficult to predict whether this situation will persist. In the UK, the economy is showing signs of softening, particularly among manufacturers. Consumer spending is flagging as well. The Continental European economic picture is mixed, with core countries remaining weak. Political uncertainty has increased with two 'no' votes on the proposed EU constitution. Nevertheless, stock valuations remain attractive, and earnings are still increasing. Despite signs of slowing exports to China and the US, the environment in Japan remains broadly positive.   Standard Bank International comment - Mar 05 Friday, 1 July 2005 Fund Manager Comment Stock selection among US, European, emerging markets, Japanese and South East Asian companies was positive. Stock picking in the UK had little effect on performance. On a global sector basis, individual investment decisions within the banking, media, energy and telecommunication services sectors were slightly offset by the negative returns generated by holdings in insurance companies. The fund's holding in Valero Energy, boosted relative performance during the period. Demand for oil refining has been very strong and as the number of refineries is limited, Valero has been able to make healthy profits. Within the insurance sector, the fund's holding in American International Group hampered returns. The share price of AIG suffered as investor sentiment towards the stock turned negative amid an investigation into the company's financial affairs by a Federal Grand Jury. The portfolio manager maintained the fund's underweight exposure to the US and UK markets relative to the benchmark index. In addition, the fund remained overweight European and Japanese equities.   Standard Bank International comment - Dec 04 Thursday, 17 March 2005 Fund Manager Comment Stock selection in the US, the UK and emerging markets contributed positively to performance. This was offset by negative stock selection in Europe and Japan. On a global sector basis, positive stock selection within the telecommunication services and consumer durables & apparel sectors and an underweight exposure to pharmaceuticals & biotechnology companies were offset by negative returns generated from holdings within the energy and healthcare equipment & services sectors. The fund's holding in Nextel Communications proved rewarding. The share price of the US telecommunication services company rose over the three-month period after it reported strong third-quarter profits. Exposure to energy equipment & services companies detracted from performance. In particular, a certain energy equipment company suffered as investors took profits in oil-related stocks following a decline in the price of oil. The portfolio manager increased the fund's underweight exposure to both US and UK equities relative to the benchmark index. The manager increased the fund's overweight position in Europe. The fund's overweight exposure to Japanese equities was reduced over the quarter.   Standard Bank International comment - Sep 04 Monday, 29 November 2004 Fund Manager Comment During the quarter, the fund returned -0.8% in US dollar terms, outperforming the benchmark MSCI World Index, which returned -1.0% over the same period. Stock selection among European and US equities contributed positively to performance. This was offset by negative security selection and asset allocation in Japan. On a global sector basis, successful investment decisions within the consumer durables & apparel and health care equipment & services sectors, as well as the benefit of an underweight exposure to food, beverage & tobacco companies, were offset by negative returns generated from holdings within the telecommunication services and media sectors. Exposure to healthcare companies boosted performance. Specifically, the share price of top-ten holding Unitedhealth Group rose over the quarter after the US healthcare provider announced a 36% increase in second-quarter profits from the same period last year. Meanwhile, shares in Nextel Communications fell over the three-month period. Although the US telecommunications company reported strong second-quarter profits, there are concerns over the effect of rising expenses, including taxes, on future revenue growth.

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