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Timothy Rangongo from finweek reviewed the Lunar BCI Worldwide Flexible Fund. Read his review: “Exposure to cutting-edge global businesses”

 

Blog 43 – Local or Offshore?

The debate on whether to invest locally or offshore has been raging again recently. Many financial commentators are comparing the returns on the JSE All Share index to the S&P 500 Index. The JSE All Share Index (ALSI) represents the broad South African stock market and the S&P 500 index represents the broad US stock market.

Let’s take a look at illustrative 10-year returns on the ALSI and the S&P 500:

The Rand weakness against the US Dollar during the last 10 years (from 7.39 to 14.00) also played a significant role in the JSE ALSI’s underperformance in the most recent 10-year period. In the last 10 years to end December 2019 – the JSE ALSI significantly underperformed aginst the S&P 500; but in the 20 years to end December 2019, it is the S&P 500 that lagged the JSE ALSI. This is largely due to the significant outperformance of the JSE ALSI in the 10 years to end December 2009.

Hindsight is a perfect science and chasing past returns is generally a bad idea. Beginning 2010, if you looked the last 10-year returns, you would have been tempted not to take any money offshore. Looking back through this would have been a costly mistake.

But let’s be cautious here because it does not mean that because the JSE ALSI underperformed in the last 10 years against the S&P 500, that this will now reverse. We can find a variety of reasons that this may not be the case:

• South Africa is faced with low economic growth, high unemployment, the impact of COVID1-19 on the economy and state resources, corruption levels in the public and private sector, etc.
• The dominance of large multinationals and technology companies offshore further makes the case for investing more of one’s savings offshore.

The counter arguments against investing in offshore markets are also many:

• Valuations play a significant role in deciding where to invest. From a historical perspective, the JSE looks cheap and the S&P 500 looks in expensive territory.
• Despite the economic malaise in SA, there are many excellent businesses here with talented and hardworking people. During this doom and gloom time, we could see good opportunities to invest in businesses that would provide a good return over the medium to long-term, because their valuations have been hammered.
• Currency fluctuations can play havoc with assets valuations, and the direction of currency movements is difficult to predict. This is especially so for the Rand. Investors who are not comfortable with fluctuations in their investment portfolios may sell in a panic, locking in losses and ultimately destroying the value of their savings and investments. Rand movement in the long-term has been one-way bet, but in the short and medium-term it has not only weekend sharply but also strengthened significantly from oversold positions.

Offshore is very wide and very big: is it US, Europe, China, Japan, India? Is it Tech sector, bio-sector, resources, healthcare, retail, ….? Is it Equities, bonds, property, …? Offshore is not just the S&P 500. This wider set of investment alternatives provides both more opportunities and more risks for investors.

The point is that the decision of whether to invest locally or offshore is not an easy one. This should not be a binary decision; it is not one or the other. There are multiple factors at play, and these are not static; decisions made now or in the future may change the opportunities and risks.

Our position then is not to be one or the other, i.e. local or offshore. We could favour one view over the other, which would mean that we would have a heavier weighting for our favoured view. We currently have a higher weighting in offshore assets (broadly favouring technology and biotechnology sectors) but also have a broader geographical diversification (i.e. not all assets are US-based).

Our aim is to provide real returns (i.e. above inflation) for our investors over the long-term. We do not favour one-way bets, where we could be either heroes or villains. We recommend that our clients invest with regular monthly debit order investments, rather than large one-off investments. This is the best way to ride out the fluctuations and volatility of markets.

We currently still favour a cautious approach both locally as well as offshore. We have taken opportunities based on our assessment of value to acquire certain assets or to move more money offshore. Similarly, we have sold certain assets if our assessment was that they were overvalued.  As an example, in the recent strengthening of the Rand against the Dollar, we took another tranche of funds offshore, to bring our offshore assets to 58% of the portfolio. We have also taken a small position in offshore emerging markets.

See our Fund Fact Sheet for additional information on the performance of the Lunar BCI Worldwide Flexible Fund, our asset allocation, top holdings and our fee structure.

Our Performance and Investment Strategy during the Covid-19 Pandemic.

 

LUNAR BCI Worldwide Flexible Fund

Investing is not easy because the market can behave in ways that is irrational in the eyes of investors or unexpected given investor sentiment and macro-economic trends. Our job as investors is thus to be able to sift through all the information that could affect share prices and identify those drivers that are pertinent at any point in time. Then, to act accordingly. This is no trivial task.

Looking back at 2019, sentiment in the South African market was and still is low, given the financial and political woes in government and state-owned enterprises; more shenanigans and greed in corporate South Africa; high levels of unemployment and no clarity on how we can get out of the mess we are in and grow our economy for wider benefit. Despite this the JSE All Share rose by over 12%, if you include dividends. The US markets reached record highs in 2019 despite trade wars and arguably a dysfunctional political environment. The Rand strengthened by approximately 2% over the US Dollar during the year, but not in a straight line.

Our strategy from late 2018, was to acquire good businesses whose prices were significantly lowered and presented much better value in the South African market and to reduce our technology exposures in the offshore market. We also took the opportunity to move cash offshore whenever the Rand showed strength. As at end December 2019, we had 44.6% of our assets offshore and 55.4% in South Africa. Our cash holdings was 15% to give us the ability to acquire assets should opportunities arise.

The graphs below show our asset allocation and sector allocation as at 31 December 2019.

Our Top 10 Equity positions as at the end of 2019 is presented below.

How did we perform?

Our investment strategy worked well for us and our fellow investors in the Lunar BCI Worldwide Flexible fund, returning 17.68% after costs for the 2019 calendar year. Over 3 years, we returned 7.48% pa (Source Moneymate).

Some of our notable returns in 2019 came from the following businesses we are invested in:

• Impala platinum (+291%)
• Naspers (+58.3%)
• Microsoft (+52.6%) in USD
• OKTA (+46.9%) in USD
• Aspen (+38.1%)
• Mediclinic (+35.9%)
• iShares Biotech ETF (+26.9%) in USD
• Amazon (+24.9%) in USD

Our most disappointing investments returns (i.e. negative returns) came from:

• Pinterest (-40.8%) in USD
• Square (-23.5%) in USD
• Long 4 Life (-11.2%)

The Rand/Dollar exchange rate did not have a material impact on performance through the year, as has been the case in previous years.

What is our strategy now?

Our investment philosophy is to invest in great businesses that provide growth over the long term, provided we can acquire them at a reasonable price. From time-to-time, we will also take tactical stakes in businesses that we do not desire to hold for the long-term. Conversely, we also reduce our stakes in great businesses that in our opinion are significantly overpriced.

We seek businesses that meet our investment philosophy and can benefit from the following core demographic trends:

• Millennials are now the largest economic power, generation-wise.
  • They shop online, are selective on where they buy homes and settle down (cities) and what they value (experiences, environment, family).
  • Many millennials are vegans.

• The world’s population is aging, and the aged need care.
  • They are price-sensitive on what they need most (financial services, healthcare, personal services, retirement villages, drugs). As longevity has increased, these services are required for longer.
  • They are more health-conscious than previous generations.
    seek retirement villages that better cater for their healthier lifestyles.

• Megacities dominate economic activity globally and the migration from rural areas and small and poor regions continues.
  • The demand for housing and services (water, electricity, transport) continues.

• Globalisation and the increasing wealth of the middle class in emerging markets shape their spending habits (supermarkets, global brands, travel).
  • However, if aspirations are not met, there is high risk of social upheaval.

• Economic powers are being challenged and challengers are being pushed back.
  • In the last few decades global GDP has shifted from the developed markets to developing markets by a ratio of approximately 80/20 to 60/40. China has been a large beneficiary of this shift, but other markets like India, Turkey, Brazil and Indonesia have also benefitted.
  • China has ambitions to retain its once dominant economic position in the world. The USA fights back with Trade Wars.
  • India too has its own ambitions of rising up the global economic ladder.
  • War in specific zones will likely be a feature (Middle East).

• Resource scarcity spurs innovation.
  • The demand for energy has spurred the revolution in renewable energy.
  • Agricultural technologies have also significantly improved yields in food production.
  • We anticipate similar innovations in water and energy technologies.
  • Commodity cycles will continue to ebb and flow providing investment opportunities.

• Technology will continue to disrupt the status quo.
  • Information, pharmaceutical and genetic technologies will continue to develop and potentially disrupt industries and businesses.
    • The next block-buster drug, gene therapy or killer-app will be key in unlocking investment opportunities.
    • Fintech is maturing and there are some real challengers to financial services incumbents.
    • Cryptocurrencies are not dead yet and may yet make a come-back.
  • As the world becomes more digital; data privacy and information security will become increasingly critical for individuals and businesses.
  • Artificial Intelligence and robotics will likely become more mainstream, but will present ethical and social dilemmas. 5G will be a key enabler in AI, Internet of Things, self-driving vehicles.
  • Space technology is maturing rapidly. 

Our overall view is that the US markets are largely overpriced, but there are selected opportunities that still present value. We broadly favour emerging markets, including selected opportunities in South Africa. We will continue to seek to invest in great businesses that meet our investment philosophy and criteria.

For more detailed information on the Lunar BCI Worldwide Flexible Fund, see our Minimum Disclosure Document.

* * * * *

Thank you to our clients, staff, directors, and business partners for your support, guidance and friendship. Whilst there are always significant risks in the financial markets, there will also be opportunities from which to profit. It is left to us to identify these risks and opportunities through our investment philosophy and methodology. Our aim to provide a platform for growing the wealth of our families and communities is intact and we will continue to utilise this and enhance it.

We look forward to continuing our journey with you; growing our business, growing your and our wealth, empowering our families and communities to grow their wealth.

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Three Years On

July 10, 2019

On 1 June 2019, we celebrated three years since the launch of the Lunar BCI Worldwide Flexible Fund.

We are very pleased with the support that we have received from our clients, business partners and our management and staff. Our clients are in fact our co-investors. Founding members of Lunar Capital continue to be significant investors in the Lunar BCI Worldwide Flexible Fund, directly aligning our interests with that of our clients’ interests and ensuring that we have skin in the game.

We are also particularly proud of the platform that we have created. Not only are we able to invest in the local equities, bonds and money markets, but we also have the ability to invest up to 100% of our fund offshore. Investors in our fund do not need to use their annual foreign exchange allowance to be able to do so.

We have also created a platform where we share what we have learnt in the markets through the Insights page on our website.

Our strategic purpose to empower families and communities and to create a platform to grow their wealth is firmly on track.

How has your and our portfolio grown?

For the period to end June 2019, our performance is a follows:

• The portfolio grew by 15.74% since inception.
  
• Our 3-year performance is 4.64% per annum (versus 4.35% per annum for the Worldwide Flexible unit trust category).
  
• All returns are after costs and include dividend and interest distributions. See our latest Minimum Disclosure Document for more detail on our performance.
  

In our opinion, this is an average performance. Behind this performance, however is some very strong performances, some average performance and a few negatives ones:

• Excellent performance from our offshore portfolio that grew by over 50% in USD since inception, led by Amazon (+137%), Okta (+59%), and Nvidia (subsequently sold).
  
• There were no significant losses from our individual offshore company investments.
  
• Locally, we had a positive but subdued performance in line with the market. Impala Platinum (+103%), FirstRand (+80%), and Equites (+28%) led the positive performers.
  
• The most notable losses in our local portfolio were from Ethos Private Equity (- 25%) and Aspen Pharmaceuticals (subsequently sold).
• The South African Rand against the US Dollar was quite volatile during the period. But the overall impact on the performance of the portfolio was low during the period.

How have we decided what we jointly own?

We continue to position the portfolio with quality businesses that we wish to hold over the long term. However, from time-to-time, some of these quality businesses can become expensive. Where we experienced this (Facebook, Nvidia, Shoprite, Discovery, PSG), we either disposed of these investments or reduced our holdings in them. We will re-invest in these businesses if they return to in value territory.

We have also diversified away from our technology-heavy positioning, largely due to valuation and market conditions. Some notable changes include:

• Offshore, we invested in the iShares Biotech ETF, Berkshire Hathaway, Okta, Walt Disney and iShares MSCI China ETF. These changes position the portfolio more defensively and to take advantage of better-valued or growth investments.

o Okta is an interesting recent investment. It provides IT Security through a secure single sign-on for the staff and clients of large organizations. It has been growing rapidly since it listed and has done well since we invested in it.

o There has been a lot of negativity on China recently, some of it driven by the trade wars taking place. Our view is that this is reflected in valuations and that there is a higher probability of upside in the Chinese markets than down side. Hence our investment in the China ETFs.

• Locally, we invested in Impala Platinum, BHP Billiton, Naspers and Mediclinic to take advantage of valuation opportunities and create more diversification.

o Implats recently announced that it will return to profitability. The share price has performed very strongly over the last year.

Our view is that there are a number of headwinds facing the South African economy, but there are some opportunities in local investments. The US market is largely in an overvalued territory but there are some companies that could continue to grow and provide good investment returns.

Our portfolio is geared toward taking advantage of demographic trends such as:

• The growing middle class in emerging markets;
  
• Ageing populations, especially in developed markets;
  
• Technological changes creating opportunities for disruption and innovation;
  
• The changing preferences of millennials;
  
• Rapid urbanisation, especially in megacities; and
  
• Climate change and the shift to cleaner energy sources.
  

We continue to assess these demographic trends, and how to position our portfolio given the opportunities that present themselves. We aim to invest only in those companies that provide growth at the right price and those that provide the potential rewards for the risk that we take. We wish to obtain above average and real returns at a portfolio level for our investors.

What do we jointly own?

Approximately 39% of our assets are offshore and 61% in South Africa. We hold 6% in cash, 5% in bonds, and 89% in equities.

The Information and Communications Technology sector still presents our largest exposure at 18%, followed by Financials (14%), Resources (13%), and Industrials (9%). Overall sector diversification is quite good currently, reflecting our defensive stance.

Our Top holding is the iShares Biotech ETF. This fits in well with view on demographic trends and it trades at a relatively good valuation. Implats recent growth has catapulted it into our second largest holding reflecting our positive views on the sector. Equites is a logistics property investment, investing in warehouses and large distribution centres for eCommerce and other large companies. The remaining top 10 holdings are reflected below reflective of our views on demographic trends, valuations and growth opportunities.

We will continue to seek opportunities for good investments, taking asset allocation decisions and managing the risks inherent in the markets.

*****

Thank you to our clients, staff, directors, and business partners for your support, guidance and friendship. Whilst there are always significant risks in the financial markets, there will also be opportunities from which to profit. It is left to us to identify these risks and opportunities through our investment philosophy and methodology. Our aim to provide a platform for growing the wealth of our families and communities is intact and we will continue to utilise this and enhance it.

We look forward to continuing our journey with you; growing our business, growing your and our wealth, empowering our families and communities to grow their wealth.

Elections Everywhere

Nigeria, Namibia, Indonesia, India, Spain, South Africa, …. Elections Everywhere. It seems like 2019 is the year of elections.

As citizens, we are all interested and invested (in the broadest sense of the word) in the outcome of the election in South Africa, and maybe even in some other countries’ elections too. We hope that the party that we support will be significantly stronger in this election than in the previous one. We are nervous of the parties that we believe to have policies that may affect our interests and aspirations. We hope that they do not get into power.

 

Whose interest?

Ultimately though, we want to protect our interests; which includes our financial interests, the education of our children, our safety, our rights, our jobs, how our taxes are used and our ability to access quality basic services. Whilst some of these interests may be selfish, it also likely includes broader societal interests. We vote hoping that the party that comes into power, will protect our interests and be beneficial to the broader society too. Arguably though, most of us may be looking at the wrong place if we are hoping that politicians will advance our interests – the state of politics and the quality of politicians in our country, magnified by the social media voice, is dire. Politics seems to attract those that have a high degree of self-interest. That, however, does not mean that we shouldn’t vote.

 

Choices

Whilst we have a duty to think carefully about who we will vote for and then to cast our vote; we can do a lot more individually to improve our lot and to improve the lot of our fellow citizens.

We worry about the risks that we cannot control, like how politicians will behave once they have been elected. Yet, we have many decisions that we can control and we can mitigate some of the risks of poor political appointments.

We can take active decisions about which schools we send our kids to; which causes we advocate and the organisations that we join; how we spend our money; how much we save and where we invest; how we manage or insure against risks; whether we forego an item of luxury today for a bit more security when we retire.

 

Decisions

What decisions have you made between investing for the future versus living the life today? Which option have you chosen for your retirement fund? How much risk are you willing to take on your investments? What portion of your investments should be invested in offshore assets?

You should think about this carefully, taking into account the environment that we find ourselves in.

 

Recent decisions we have taken at Lunar Capital

We are cognisant of the impact that the elections can have on our investments. However, this is not the only factor that we consider when making investment decisions. We consider the economic environment, individual companies and their respective valuations, demographic trends, risks, and the overall construction of our portfolio; when we make decisions on what, where and how much we will invest.

The graphs below show our portfolio construction at the moment:

 

Approximately 36% of our portfolio is in offshore assets, 9% in cash and the portfolio is reasonably diversified across industries and geographies.

These represent our views that there is value in the local market, but there are risks and it is, therefore, important to have a meaningful offshore exposure. We are always on the lookout for opportunities for new investments as well as risks in our existing investments.

Just as we have choices and make decisions at Lunar Capital, you too have certain choices and you too can make decisions. Understand the choices that you have and make the decisions to advance your and your family’s long-term well-being.

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Transcript

In a few days, many people will be taking some time off from work for their annual vacation. That is of course if they are fortunate enough to have a job.

So, when I was thinking about this blog, several thoughts came to mind:

• Firstly, let’s do something different; hence the podcast;
• Then, I thought about a fascinating book that I have been reading by Matthew Walker titled “Why we Sleep”;
• I also thought about what am I going to do over this period.

There are always mixed feelings over this period for me. Firstly, there’s the mad rush to make sure that I complete all the tasks and goals that I had set out for myself before I go on vacation with my family. Then, there’s this angst about all that is happening out there: How will the stand-off between the United States and China play out? What is Vladimir Putin planning now? Will anything come out of the State Capture Judicial Commission? How will the elections in South Africa pan out in 2019? The list can go on and on …. All of these can have some bearing on how the markets perform and ultimately on the performance of the portfolio too.

Coming back to the Walker’s book on Why We Sleep. This latest research and conclusions on the importance of sleep for mental and physical health are profound. Very aptly, you should try to get 8 hours of sleep daily. This is good for your physical and mental health, for your creativity, memory retention and emotional well-being.

On reading the book, I could not help thinking about the importance of taking some time off regularly to clear one’s mind, to spend some quality time with good friends and family, re-connect with nature, get some exercise and some rest, switch off from all the noise in the media, and use the time to read a few good books. I have a few books that I want to read: 21 Lessons for the 21^st Century by Yuval Noah Hariri and the Lean Start Up by Eric Ries. I’d like to also get through a novel or two.

The time off will also be good preparation for the year ahead. Whilst, we have done quite a lot of analysis on our investment strategy for 2019 and started implementing them, I’m sure after a good rest, there would be some more thoughts and ideas that we could test and implement.

From a personal financial point of view, this is also a good time to check if my financial plans are still intact. Should I do something different?

• Spend less and invest more perhaps after the dire markets of the last few years?
• Will I have sufficient funds when I retire?
• What will I change of my investment strategy: more or less offshore, which markets, etc?
• Is my Family Balance Sheet up-to-date?

Taking a good break will go a long way in reenergising our minds and bodies. This will be good preparation for the year ahead.

Mostly though I am looking forward to spending time with my family and good friends and having some fun times with them.

Wishing you all of the best.

Stay safe.

Market Overview

The market has been on a roller coaster ride over the last 3 months, showing good gains in August, but having a significant pull-back in September and October, both locally and offshore.

The markets are largely driven by high valuations in the US; rising interest rates in the USA and Europe; and low appetite for emerging markets, possibly as a consequence of trade wars and governance issues.

Whilst there are macro-economic and socio-political risks, there are pockets of value emerging in South Africa.

Portfolio Overview

The portfolio declined in October, more or less in line with the market.

During the month, we sold some of our Amazon and Nvidia shares to further reduce our Technology exposure and to increase our cash holdings. We do however think that these are great businesses.

Approximately 36% of the portfolio is offshore; 29% of the portfolio is in Cash; 15% is in the Technology sector; 22% in Financials; and 8% in Biotechnology. The high cash exposure is conservative and allows us to acquire companies we deem are cheap relative to intrinsic value.

We continually seek opportunities in our preferred investment themes to deploy our cash, but remain patient until the right opportunities present themselves.

Key Indicators

Top 10 Holdings

What we are thinking about: Good Markets, Bad Markets

\”The biggest mistake that most people make is to judge what will be good by what has been good lately. So, if a market has gone up a lot, they think that\’s a good market, rather than it\’s more expensive, and when the market goes down a lot, they think, \’That\’s a bad market, and I don\’t want any of it,\’ rather than realizing it may be a good time to buy certain stocks at a bargain price.” Ray Dalio, Bridgewater Associates

It is common sense that we should buy something when the price is cheaper than the value that we can derive from it. Similarly, we should be selling when we can get more than the value that we can derive from the asset that we want to sell. Strangely, people do not behave this way when they buy stocks on the stock market. When stock prices have had a good run, then most people want to buy stocks; and similarly, when there has been a major drop in the stock market, then investors want to be selling their stocks. The gyrations in the stock market can truly mess with an investor’s mind.

Ray Dalio, from Bridgewater Associates puts it in a very nice way with his quote above. The guidance that one should take from Dalio is that the market is more expensive when the stock markets have gone up, especially when it has gone up over a very long period of time. Similarly, when there is a major sell-off in the market, then the market is in fact cheaper than it was. If one looks at the US markets, it has risen significantly over the last 10 years or so. The South African market, on the other hand has been more-or-less flat over the last 3 years. One can thus argue that there are better opportunities in the South African market than there are in the USA markets.

The bigger lesson though is that investors should be buying more when markets have come down significantly, and similarly being more cautious when markets have gone up a lot. Psychologically, this is very difficult to do. We are wired to feel more pain when we take losses in our portfolio than the commensurate joy when we have profited in the portfolio.

Avoid the mistakes that Ray Dalio warns against. Don’t panic when the markets have come down a lot. This is probably the wrong time to be selling if you are a long-term investor. Similarly, when the markets have risen a lot, don’t be tempted to make a quick buck. Successful investors have a long-term strategy of investing. They allocate an amount to invest every month (debit orders are a great and efficient way to do this). They ignore day-to-day gyrations in the market. They review their asset allocations (i.e. which funds, asset classes, geographies, industries they want to invest in) once or twice a year. They give their investments time to grow.

Don’t let emotions drive your investing behaviour. Buy low, sell high. Not the other way around.

Transact Online

Clients invested in the Lunar BCI Worldwide Fund can obtain statements, tax certificates or transact online at: https://www.bci-transact.co.za/Webclient/Login

Investors considering an investment in the Lunar BCI Worldwide Flexible Fund can obtain more information at www.lunarcapital.co.za and obtain application forms at https://lunarcapital.co.za/forms/.

Disclaimer

Boutique Collective Investments (RF) (Pty) Ltd (“BCI”) is a registered Manager of the Boutique Collective Investments Scheme, approved in terms of the Collective Investments Schemes Control Act, No 45 of 2002 and is a full member of ASISA. Collective Investment Schemes in securities are generally medium to long term investments. The value of participatory interests may go up or down and past performance is not necessarily an indication of future performance. BCI does not guarantee the capital or the return of a portfolio. Collective Investments are traded at ruling prices and can engage in borrowing and scrip lending. A schedule of fees, charges and maximum commissions is available on request. BCI reserves the right to close the portfolio to new investors and reopen certain portfolios from time to time in order to manage them more efficiently. Additional information, including application forms, annual or quarterly reports can be obtained from BCI, free of charge. Performance fees are calculated and accrued on a daily basis based upon the daily outperformance, in excess of the benchmark, multiplied by the share rate and paid over to the manager monthly. Performance figures quoted for the portfolio are from Morningstar, as at the date of this minimum disclosure document for a lump sum investment, using NAV-NAV with income reinvested and do not take any upfront manager’s charge into account. Income distributions are declared on the ex-dividend date. Actual investment performance will differ based on the initial fees charge applicable, the actual investment date, the date of reinvestment and dividend withholding tax. BCI retains full legal responsibility for the third party named portfolio. Although reasonable steps have been taken to ensure the validity and accuracy of the information in this document, BCI does not accept any responsibility for any claim, damages, loss or expense, however it arises, out of or in connection with the information in this document, whether by a client, investor or intermediary. This document should not be seen as an offer to purchase any specific product and is not to be construed as advice or guidance in any form whatsoever. Investors are encouraged to obtain independent professional investment and taxation advice before investing with or in any of BCI\’s products.

This research report (“report”) is confidential, issued for the information of clients of Lunar Capital (Pty) Ltd (“Lunar”) and may not be issued to members of the, nor published in, public. The information, research and opinions contained herein have been formulated in good faith and where applicable have been derived from published sources generally reliable and believed to be fair, however the information, research and opinions, as the case may be, are not warranted to be complete or accurate. Lunar does not assume liability or responsibility for their form, sufficiency or accuracy. Any person making use of this report does so entirely at his or her own risk. Lunar does not assume liability for any losses arising from any errors or omissions in this report, irrespective of whether there has been any negligence, including gross negligence, by Lunar, its affiliates, officers or employees, and whether such losses are direct, indirect or consequential. This report is neither an offer nor a solicitation to buy or sell, and is not intended to call attention to, or to market, or promote the services of Lunar. Lunar does not have a proprietary interest, other than a possible casual or arbitrage interest, in any of the listed companies referred to herein and no director of Lunar, unless otherwise stated in this report, is a director of the companies referred to herein. Lunar Capital (Pty) Ltd, FSP 46567, Reg No. K2015013022. Collective Investment Schemes in securities (CIS) are generally medium to long term investments. The value of participatory interests may go down as well as up and past performance is not necessarily a guide to the future. CIS are traded at ruling prices and can engage in borrowing and scrip lending. A schedule of fees and charges and maximum commissions is available on request from the company/scheme. Commissions and incentives may be paid and if so, would be included in the overall costs. The Unit Trust portfolios are licensed under the Boutique Collective Investments Scheme. Boutique Collective Investments is a full member of the Association for Savings & Investments SA.