Oasis Crescent Global Medium Equity Balanced Fund Report - 3rd Quarter 2020

Transcription

1. FUNDFACTS QUARTER OASIS CRESCENT GLOBAL MEDIUM EQUITY BALANCED FUND Fund Manager Adam Ebrahim Min . Initial Investment GBP 5 000 Launch Date 29 February 2012 Min. Additional Investment GBP 1 000 Risk Profile Low to Medium Fund Size GBP 15.0 million Benchmark Global Balanced Medium Equity Blended Benchmark Total Expense Ratio 1.32% 3-2020 The benchmark is made up of the Consumer Price Index (CPI) rate of the OECD countries. The Oasis Crescent Global Medium Equity Balanced Fund (OCGMEBF) is a specialist, worldwide asset allocation portfolio. The objective of the fund is to achieve medium to long-term growth of capital and income by investing on a global basis in securities that are ethically, morally and Shari’ah compliant. This objective is to be achieved by investing the Sub-Fund’s Net Assets in a broadly diversified and balanced mixture of global securities. The range of investments will be allocated in the asset classes of equity, property and income. Cumulative Returns Return Since Inception Mar-Dec 2012 2013 2014 2015 2016 2017 2018 2019 YTD Sept 2020 Cumulative Annualised Oasis Crescent Global Medium Equity Balanced Fund 1.8 11.1 14.3 2.5 23.3 (1.5) (2.3) 8.0 (1.0) 68.1 6.2 Global Balanced Medium Equity Blended Benchmark 0.5 4.6 9.6 3.8 23.5 3.3 (1.2) 12.0 1.4 71.3 6.5 OECD Inflation 1.5 1.4 1.6 0.7 1.4 2.4 2.8 1.8 1.0 15.6 1.7 Cumulative Returns Performance (% returns) in GBP, Net of Fees, Gross of Non Permissible Income of the Oasis Crescent Global Medium Equity Balanced Fund since inception to 30 September 2020 (Source: Oasis Research using www.oecd.org: Bloomberg: March 2012 - September 2020) *Note: Adjusted for non-recoverable withholding taxes. **Note: OECD Inflation benchmark lags by 1 month. Annualised Returns Return Since Inception % Growth 1 year % Growth 3 year % Growth 5 year % Growth 7 year Oasis Crescent Global Medium Equity Balanced Fund (2.1) 2.0 5.8 6.1 6.2 Global Balanced Medium Equity Blended Benchmark (0.9) 4.8 8.6 7.4 6.5 1.3 2.1 1.9 1.7 1.7 Annualised Returns OECD Inflation Annualised Performance (% returns) in GBP, Net of Fees, Gross of Non Permissible Income of the Oasis Crescent Global Medium Equity Balanced Fund since inception to 30 September 2020 (Source: Oasis Research using www.oecd.org: Bloomberg: March 2012 - September 2020) *Note: Adjusted for non-recoverable withholding taxes. **Note: OECD Inflation benchmark lags by 1 month. Asset Allocation Asset Allocation September 2020 OCGMEBF % Equity 50 Income 43 Property Total 7 100 Asset Allocation of the Oasis Crescent Global Medium Equity Balanced Fund (30 September 2020) (Source: Oasis Research: August 2020) Performance is indicative only and for the period from inception to October 2016, is based on the Class A (USD) Shares (Dist). It has been converted to GBP on a monthly basis using the closing GBP/USD exchange rate as published by Bloomberg. A pound sterling class was launched on 15 May 2012, and from November 2016 performance is based on the Class E (GBP) Shares (Dist). Past performance is not indicative of future returns. GIPS compliant & verified
2. Fund Manager Comments Global economic activity rebounded strongly into 3Q 2020 following the worst contraction on record since the Great Depression in 2Q due to simultaneous COVID-19 related lockdowns over March and April . The composite global manufacturing and services PMI recovered over 3Q 2020 to an average level of 51.9 after just 36.8 in 2Q during which the historic low of 26.2 was recorded in April, at the height of the global lockdowns1 . Global monetary policy continued to remain highly supportive, a combination of near zero policy rates and ongoing quantitative easing. Of note, the Federal Reserve moved to adopt an average inflation targeting framework at its September FOMC meeting, indicating that they would not raise interest rates until inflation had been higher than 2% “for some time”. At face value, it would seem that monetary policy tightening from the Federal Reserve is not likely over the next few years. Despite the explicit and committed support from monetary authorities, the sustainability of the global economic rebound is at risk from 2 sources: namely, signs of a rapidly developing 2nd wave of global COVID-19 infections, particularly in Europe, and the associated re-imposition of lockdown measures as well as premature withdrawal of fiscal stimulus. In the US, for example, the provisions of the CARES Act expired on 31st July against the backdrop of a still-historically weak labor market, placing millions of vulnerable families at risk. While Congress is debating a fresh fiscal stimulus package, and chances of a deal look good once the 3rd November Presidential election is out of the way, political jockeying ahead of the election has so far appeared to stymie the chances for a much needed near-term deal. The European Union meanwhile announced a fiscal stimulus package worth €750bn in late July to facilitate economic recovery in Europe where almost one-third of funds is allocated toward the ‘green’ economy2. From an investment, economic and social perspective, the outlook remains exceptionally challenging. Looking ahead, much will fundamentally depend on the evolution of the COVID-19 pandemic itself. Consecutive infection waves combined with re-imposition of lockdown measures will hamper a sustained economic recovery until a proven vaccine is available. Until such time, politicians and policymakers will continue to grapple with profound social and economic trade-offs between literally saving lives, on the one hand, while trying to protect economic livelihoods, on the other, especially of low- to middle-income workers in face-to-face services sectors such as retail and hospitality who have borne the brunt of job losses. The strong recovery that was seen in global equity markets during Q2 2020 was followed up by a solid performance in Q3 2020. The MSCI World Index increased by 8.0% with the Technology sector continuing to outperform increasing by 11.9% with the Energy sector lagging with a decline of 15.7% 3. The S&P 500 increased by 8.9%, the Nikkei by 4.6% while the FTSE100 lagged and declined by 4.0%4. The MSCI Emerging Markets also recorded a continued recovery in Q3 2020 increasing by 9.7% 5. The massive support from fiscal and monetary policy is fully offsetting the impact of revenue loss and decline in profits due to the contraction in demand and job losses as well as the impact of corporate margin compression. However, there remains a lot of uncertainty around how fast corporates will be able to recover their profits and this could lead to substantial market volatility. The full impact of the Covid-19 related tenant relief on rental income and REIT balance sheets is in the process of working through the system. A positive is that we will see very low levels of capital investment and development activity which curtails new supply and creates an improving environment for existing property owners over the medium to longer term. It is important to remember that property valuations are based on the long term cash flows that will be generated by the property and the disruption caused by this pandemic is of a short term nature. REITS exposed to the Retail and Office sectors have been impacted more severely while tenants of Logistics and Datacenter REITS have actually benefitted from increased online sales and data usage. Healthcare REITS with exposure to research and development facilities are also benefitting from increased demand for space. The Oasis Crescent Global Property Equity Fund is well positioned due to its focus on REITS with positive secular demand drivers, strong management teams and superior balance sheets. With 51% of the portfolio (excluding cash and liquid holdings) being exposed to logistics, industrial and data center REITS with strong positive secular demand drivers and only 8% exposure to Retail REITS, the Fund is appropriately positioned6. The Fund displays very attractive valuation characteristics with an average cash flow yield of 7.3% and dividend yield of 4.9% which offers a lot of value relative to the average bond yield of 1.0% and average inflation at 0.9%7. The full impact of the Covid-19 related tenant relief on rental income and REIT balance sheets is in the process of working through the system. A positive is that we will see very low levels of capital investment and development activity which curtails new supply and creates an improving environment for existing property owners over the medium to longer term. It is important to remember that property valuations are based on the long term cash flows that will be generated by the property and the disruption caused by this pandemic is of a short term nature. REITS exposed to the Retail and Office sectors have been impacted more severely while tenants of Logistics and Datacenter REITS have actually benefitted from increased online sales and data usage. Healthcare REITS with exposure to research and development facilities are also benefitting from increased demand for space. The Oasis Crescent Global Property Equity Fund is well positioned due to its focus on REITS with positive secular demand drivers, strong management teams and superior balance sheets. With 51% of the portfolio (excluding cash and liquid holdings) being exposed to logistics, industrial and data center REITS with strong positive secular demand drivers and only 8% exposure to Retail REITS, the Fund is appropriately positioned8. The Fund displays very attractive valuation characteristics with an average cash flow yield of 7.3% and dividend yield of 4.9% which offers a lot of value relative to the average bond yield of 1.0% and average inflation at 0.9%9. 1 - Bloomberg economic statistics, Oasis Research - 2 - IMF, Policy Responses to COVID-19. https://www.imf.org/en/Topics/imf-and-covid19/Policy-Responses-to-COVID-19 - 3 - Bloomberg, Oasis Research, Sep 2020 - 4 - Bloomberg, Oasis Research, Sep 2020 - 5 - Bloomberg, Oasis Research, Sep 2020 - 6 - Oasis Research, Sep 2020 - 7 -Oasis Research, Sep 2020 - 8 - Oasis Research, Sep 2020 - 9 - Oasis Research, Sep 2020 GIPS compliant & verified Contact us : Disclaimer : Oasis Global Management Company (Ireland) Ltd. Undertakings for Collective Investments in Transferable Securities (UCITS) are generally medium to long term investments. Past performance is not indicative of future returns. Authorised by the Central Bank of Ireland Warning: The value of your investment may go down as well as up and past performance is not a reliable guide to future performance. Registration Number: 362471 4th Floor, One Grand Parade, Dublin 6, Ireland Tel: +353 1 495 9800 Fax: +353 1 495 9888 UK Free Phone: 0808 238 7543 Email : info@oasiscrescent.com www.oasiscrescent.com Custodian : BNP Paribas Securities Dublin Branch Deductions for charges and expenses are not made uniformly throughout the life of the product, but are loaded disproportionately onto the early period. A schedule of fees and charges is available from Oasis Global Management Company (Ireland) Ltd. (“the Management Company”) on request. Where exit fees are applicable shares are redeemed at the net asset value and the exit fee is deducted and the balance is paid to the investor. UCITS are traded at ruling prices and forward pricing is used. Portfolios are valued at 08h00 daily using the previous day’s prices as at 22h00 GMT. All necessary documentation must be received before 14h00. Investments are made globally across a number of countries and currencies. Warning:This product may be affected by changes in currency exchange rates. Prices are calculated on a net asset value basis which is the total value of all assets in the Oasis Crescent Variable balanced Fund, a “Sub-Fund” of Oasis Crescent Global Investment Fund (Ireland) plc (the “Fund”), including any income accruals and less any permissible deductions from the Sub-Fund which may include but not be limited to auditors fees, bank charges, custodian fees, management fees and investment advisory fees. UCITS can engage in borrowing and scrip lending and may borrow up to 10% of the market value of the portfolio to bridge insufficient liquidity. Warning: The income that an investor may get from an investment may go down as well as up. FP126 - 07/2020 The Management Company and the Fund are regulated by the Central Bank of Ireland and the UCITS funds are managed in accordance with the UCITS regulations (Ireland). Performance figures quoted are from Oasis Research and Bloomberg for the period ending 30 September 2020 for lump sum investment, using NAV-NAV prices with income distributions reinvested. Returns may vary depending on the actual date of investment and the actual date of reinvestment of income. The Key Investor Information Documents or a full Prospectus are available on request from the Management Company and Oasis Crescent Management Company Ltd. The Fund is regulated by the Central Bank of Ireland and the Sub-Fund is registered with the Financial Sector Conduct Authority for distribution in South Africa, the Swiss Financial Markets Supervisory Authority in Switzerland, the Monetary Authority of Singapore in Singapore, the Securities and Commodities Authority of the United Arab Emirates and with the Financial Conduct Authority for distribution in the United Kingdom. The Sub-Fund has a Total Expense Ratio (TER) of 1.32%, which is the average Net Asset Value of the portfolio incurred as charges, levies and fees related to the management of the portfolio. A higher TER does not necessarily imply a poor return, nor does a low TER imply a good return. The ratio does not include transaction costs. The current TER cannot be regarded as an indication of future TERs. Full details and basis of accolades received are available from the Management Company and Oasis Crescent Management Company Ltd. All information and opinions provided are of a general nature and the document contains no express or implied recommendation, warranty, guidance, advice or proposal that the products are appropriate to the investment objectives, financial situation or needs of any individual or entity. All data and information (unless otherwise stated) is as at 30 September 2020.