The second quarter of 2019 was largely dominated by Momentum factors, as Price Momentum (+13.7%) lead the way with Earnings Revisions (+6.7%) also delivering a strong performance. After a strong recovery in Q1, Value factors fell, with Dividend Yield (-7.2%) performing worst and Price to Book (-3.5%) also struggling. Quality factors, namely Return on Equity (-2.1%) and Debt to Equity (-0.5%) produced fairly neutral returns compared to the previous quarter.
Key events that impacted performance in Q2 2019
We saw stock market gains in developed markets in Q2, despite a steep fall in May due to concerns over the US-China trade war. Stock markets were supported by increasingly accommodative central banks and hopes of progress in trade tensions by the end of June. Comments from US President Trump about imposing then-suspended tariffs on Mexican imports drove markets, while signs emerged of progress in talks with China. Emerging market shares recorded a slight gain (but underperformed the MSCI World) in a volatile second quarter. Domestically, equity markets posted solid gains despite soft macro and activity data and FRAs pricing in 40 basis points of cuts over the next 12 months.
Click here to download the PDF version.
Satrix Managers (RF) (Pty) Ltd (Satrix) a registered and approved Manager in Collective Investment Schemes in Securities and an authorised financial services provider in terms of the FAIS. Collective investment schemes are generally medium- to long-term investments. Unit Trusts and ETFs the investor essentially owns a “proportionate share” (in proportion to the participatory interest held in the fund) of the underlying investments held by the fund. With Unit Trusts, the investor holds participatory units issued by the fund while in the case of an ETF, the participatory interest, while issued by the fund, comprises a listed security traded on the stock exchange. ETFs are index tracking funds, registered as a Collective Investment and can be traded by any stockbroker on the stock exchange or via Investment Plans and online trading platforms. ETFs may incur additional costs due to it being listed on the JSE. Past performance is not necessarily a guide to future performance and the value of investments / units may go up or down. A schedule of fees and charges, and maximum commissions are available on the Minimum Disclosure Document or upon request from the Manager. Collective investments are traded at ruling prices and can engage in borrowing and scrip lending. Should the respective portfolio engage in scrip lending, the utility percentage and related counterparties can be viewed on the ETF Minimum Disclosure Document. The Manager does not provide any guarantee either with respect to the capital or the return of a portfolio. The index, the applicable tracking error and the portfolio performance relative to the index can be viewed on the ETF Minimum Disclosure Document and/or on the Satrix website. Performance is based on NAV to NAV calculations of the portfolio. Individual performance may differ to that of the portfolio as a result of initial fees, actual investment date, dividend withholding tax and income reinvestment date. The reinvestment of income is calculated based on actual distributed amount and factors such as payment date and reinvestment date must be considered. If the fund holds assets in foreign countries it could be exposed to the following risks regarding potential constraints on liquidity and the repatriation of funds: macro-economic, political, foreign exchange, tax, settlement and potential limitations on the availability of market information.
