Satrix style tracker Q1 2019

What worked and what didn’t in Q1 2019?

| 8 May 2019

Factor performance review at a glance

After a disappointing fourth quarter in 2018 from a factor performance perspective, both Momentum and Value factors saw a rebound and delivered positive return spreads. Value factors led the way with Price to Book (+11.7%) and Dividend Yield (+6.8%) paying off handsomely. Both Momentum factors, Price and Earn-ings delivered positive outcomes, while the Quality factors of Return on Equity (-4.2%) and Debt to Equity (-3.3%) fell over the three months.

Key events that impacted performance in Q1 2019

Equity markets made gains in Quarter One, as a generally positive sentiment was fueled mainly by an increasingly dovish tilt in Fed commentary, an apparent progress in US-China trade talks, and as the US government shutdown ended. Despite the S&P 500 Index posting its best start to the year in a decade, the inversion of the US yield curve at the end of the quarter put a damper on the initial bullish mood, with recession concerns looming. Domestically, equity markets posted solid gains. However, a key risk remains Eskom, with the electricity availability factor dropping to 65% at the beginning of the year – leading to stage four load shedding.

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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.
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