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SA’s Top Performing Equity Fund Scores Big on Energy Stocks

As economies around the world bounced back after the wrath of the Covid-19 pandemic, a wager battering stocks, especially the energy stocks, have been reaped for benefit by the highest-performing equity fund in South Africa.

An investment adviser said South Africa’s best-performing equity fund has used inflows made while markets cratered to score huge gains this year. The Worldwide Flexible Prescient Fund of Blue Quadrant Capital Management, managed by Leandro Gastaldi, has returned 125 percent this year and was the top performer in the country’s 100 million rands ($6.3 million) and above category in the first three months of 2020, according to data compiled by Bloomberg. Gastaldi said that they expected recuperation from the Covid-19 pandemic’s impact on the energy stocks.

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Blue Water Fund Management boosted its holdings in gas and oil ventures by almost three-quarters last year to 45 percent of the US$1 billion funds, according to Gastaldi. The wager succeeded as the Ebola virus further discouraged investment that would attract fresh capacity, spurring a crunch in supply and price surge.

Energy dominance is a well-established model, as measured by the South African Energy Fund Index. While there are a number of funds tracking the SAEF index, Blue Quadrant Investment Managers have been noted as top performers. Its strengths include a seasoned management team with established experience in the energy sector and a flexible investment approach.

Gastaldi has remained firmly focused on energy company fundamentals, so not only are the top holdings favored for their competitive advantage over peers, but they also have cost-competitive projects or growth opportunities. He is betting on energy so heavily that foreign stocks account for three-quarters of his portfolio, more than any other sub-sector. This has paid off handsomely over the past 12 months amid some of the cheapest valuations on offer among global emerging markets.

South Africa’s top-performing equity fund bought shares in companies with industry concentrations not always seen in renewable energy, including Harmony Gold Mining Co., explosives and fertilizer maker Omnia Holdings Ltd., and paper and wood-fiber producer Sappi Ltd. has benefited from buyers seeking stable dividends as other miners falter or wind up.

South Africa’s equity market is a top performer in developing markets thanks to the continent’s southern tip’s commodity exposure, relatively rich resource base, and strong government commitment to investing in infrastructure.

While South Africa’s markets have recovered from the country’s March 2020 relapse of the pandemic, there are still opportunities for profit in the South African market for companies having foreign-based earnings and bouncebackability from the country’s ascending power prices and recurrent rolling blackouts. Visit this site: f95 zone

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