FundFactSheetsOnline by Ngcsoft Web & Software - The Ultimate in South African Unit Trusts
Unloved stocks present buying opportunities
2017-08-23by Simon Raubenheimer Allan Gray
Investor sentiment towards emerging markets remains weak. This has left emerging markets at a valuation discount to developed markets. The MSCI Emerging Market Index trades at a discount of over 30% to the MSCI World Index – an index dominated by the US and other developed markets – on a price to earnings (PE) basis. Our offshore partner Orbis is taking advantage of this valuation disparity: 24% of the Allan Gray Balanced Fund's foreign equities are listed in emerging markets.

A comparable trend is unfolding in South Africa. Domestic businesses exposed to the vagaries of local economic and political trends are trading some way off their highs or remain suppressed. This includes our construction (Aveng, Group Five), healthcare (Netcare, Life Healthcare) and industrial companies (Nampak, KAP), as well as our banks. Businesses exposed to Africa have fallen similarly out of favour (MTN, Nampak).

The price you pay counts

Empirical data over long time periods and across multiple markets suggests that stock market returns aren't correlated to economic growth prospects. What matters is the price you pay or starting valuations. This is no different in Nigeria, currently the largest country weighting in the Allan Gray Africa ex-SA Equity and Bond Funds, which comprise together about 2% of the Allan Gray Balanced Fund.

Find Full Original Article Here

Raubenheimer,S (August 2017)
Allan Gray Management Company
Allan Gray-Orbis Global Optimal FoF Allan Gray Stable Fund Allan Gray Optimal Fund
Allan Gray Bond Fund Allan Gray Money Market Fund Allan Gray Equity Fund

Unloved stocks present buying opportunities
2017-08-23by Simon Raubenheimer Allan Gray
Investor sentiment towards emerging markets remains weak. This has left emerging markets at a valuation discount to developed markets. The MSCI Emerging Market Index trades at a discount of over 30% to the MSCI World Index – an index dominated by the US and other developed markets – on a price to earnings (PE) basis. Our offshore partner Orbis is taking advantage of this valuation disparity: 24% of the Allan Gray Balanced Fund's foreign equities are listed in emerging markets.

A comparable trend is unfolding in South Africa. Domestic businesses exposed to the vagaries of local economic and political trends are trading some way off their highs or remain suppressed. This includes our construction (Aveng, Group Five), healthcare (Netcare, Life Healthcare) and industrial companies (Nampak, KAP), as well as our banks. Businesses exposed to Africa have fallen similarly out of favour (MTN, Nampak).

The price you pay counts

Empirical data over long time periods and across multiple markets suggests that stock market returns aren't correlated to economic growth prospects. What matters is the price you pay or starting valuations. This is no different in Nigeria, currently the largest country weighting in the Allan Gray Africa ex-SA Equity and Bond Funds, which comprise together about 2% of the Allan Gray Balanced Fund.

Find Full Original Article Here

Raubenheimer,S (August 2017)
Allan Gray Management Company
Allan Gray-Orbis Global Optimal FoF
Allan Gray Stable Fund
Allan Gray Optimal Fund
Allan Gray Bond Fund
Allan Gray Money Market Fund

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