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This website is for Wholesale Clients (as defined in the Corporations Act and applicable regulations) only and provides information on our products, strategies and services. Please remember capital is at risk and past performance is not a guide to the future.

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Investment views

Investec Global Equity Q1 Update

15 April 2019
Author: Rhynhardt RoodtCo-Head of 4Factor

Portfolio Manager Rhynhardt Roodt reviews Q1 2019 for the Global Equity strategy and provides his outlook going forward.


I’m Rhynhardt Roodt, Portfolio Manager for our Global Equity Strategy.

The last three months have been very positive for strategy performance. After a very volatile closing few weeks of 2018, our analysis led us to believe that valuations across the portfolio were very oversold, giving us some conviction to stay the course with the portfolio’s positioning. This conviction proved correct and the strategy outperformed its benchmark over each of the last three months. Although the screening part of our process helped portfolio performance over the quarter, recent good performance was largely due to strong stock-picking by our team of analysts.

Looking at performance details, the last three months have been especially good for returns in the consumer staples sector. A large part of this contribution was due to a trend which has been steering investments across the 4Factor range, namely the premiumisation of Chinese consumer spending. China’s growing middle class and the country’s efforts to evolve to a consumption-led economic model have led our process to uncover several unique investment opportunities which we believe will offer attractive growth opportunities in a sector plagued by years of sluggish growth.

For the core portfolio, this trade was most evident over the quarter with pork producer, WH Group, which also benefitted from the de-escalation of trade tensions with the US, as well as Chinese distiller, Moutai. The growth opportunity presented by China also drove returns in the financial sector as a significant portion of the outperformance delivered by Asian insurer, AIA Group, over the last three months came after news broke that Chinese regulators had accepted the company’s request to expand into an additional three regions. This got the market very excited about the company’s ability to capture the growth opportunity presented by the country.

Outside of these two sectors, we also benefitted from solid results by cloud infrastructure provider VMware, and payments processor Worldpay. Both demonstrated their ability to capture the structural growth opportunities presented by our growing reliance on internet and digital services. Worldpay’s share price was bolstered further after it attracted a takeover bid from competitor, Fidelity National Information Services.

On the other side of the quarter’s performance spectrum, we experienced some setbacks across the materials sector as US chemical firms, DowDuPont and Mosaic, both retreated amid concerns about slowing demand in their respective end markets. While we exited out of Dow, we believe that Mosaic still makes an attractive investment opportunity, although we have indeed reduced our position size to reflect lower conviction levels.

Healthcare also presented a performance challenge as proposed changes to the US’s drugs pricing framework led several insurance and benefits managers to underperform. For the core portfolio, this was reflected in relative underperformance from Cigna, Medtronic and United Health but we remain invested in each firm and are in the process of assessing the likely impact the regulation could have on each stock’s 4Factor credentials.

So while the year has started for us on a positive note, we will not be complacent and we will certainly continue to use our disciplined 4Factor investment process to unearth attractive investment opportunities on behalf of our clients.




The value of investments, and any income generated from them, can fall as well as rise. Where charges are taken from capital, this may constrain future growth.

Past performance is not a reliable indicator of future results. If any currency differs from the investor's home currency, returns may increase or decrease as a result of currency fluctuations.

Investment objectives and performance targets may not necessarily be achieved, losses may be made. 

No representation is being made that any investment will or is likely to achieve profits or losses similar to those achieved in the past, or that significant losses will be avoided.

Specific risks: 

Currency exchange: Changes in the relative values of different currencies may adversely affect the value of investments and any related income. Derivatives: The use of derivatives is not intended to increase the overall level of risk. However, the use of derivatives may still lead to large changes in value and includes the potential for large financial loss. A counterparty to a derivative transaction may fail to meet its obligations which may also lead to a financial loss. Emerging market (inc. China): These markets carry a higher risk of financial loss than more developed markets as they may have less developed legal, political, economic or other systems. Equity investment: The value of equities (e.g. shares) and equity-related investments may vary according to company profits and future prospects as well as more general market factors. In the event of a company default (e.g. insolvency), the owners of their equity rank last in terms of any financial payment from that company.

Calendar year performance (%)
Strategy (Index*): 2018: -1.1 (-0.6), 2017: 16.2 (14.8), 2016: 4.4 (8.4), 2015: 10.3 (9.8), 2014: 12.3 (13.9)
Source: Investec Asset Management, 31 March 2019. Performance stated as gross of investment management fees in AUD. Gross income reinvested. *MSCI All Country World Index NDR (MSCI World NDR pre 01.10.10).

Rhynhardt Roodt
Rhynhardt Roodt Co-Head of 4Factor

Important information

In Australia, this is provided for general information only to wholesale clients (as defined in the Corporations Act 2001).

All the information contained in this communication is believed to be reliable but may be inaccurate or incomplete. Any opinions stated are honestly held but are not guaranteed and should not be relied upon. This is not a buy, sell or hold recommendation for any particular security. Portfolio holdings may change significantly over a short period of time.

Any decision to invest in strategies described herein should be made after reviewing the offering document and conducting such investigation as an investor deems necessary and consulting its own legal, accounting and tax advisors in order to make an independent determination of suitability and consequences of such an investment. This material does not purport to be a complete summary of all the risks associated with this Strategy. A description of risks associated with this Strategy can be found in the offering or other disclosure document for the Strategy. Investec does not provide legal or tax advice. Prospective investors should consult their tax advisors before making tax-related investment decisions.

Issued by Investec Asset Management, July 2019.

The content of this page is intended for investment professionals only and should not be relied upon by anyone else

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