The Fund delivered a return of -2% for June compared to the All Share return of -1%. Resources (+0.8%) were the best performers with Financials (-4.1%) and Industrials (-1.3%) lagging.

The biggest contributors to our portfolio for the month were as follows: Billiton (+12.4%), Telkom (+4%), Sasol (+3.5%) and Gijima (+5.7%). Against this, our exposure to interest sensitive stocks hurt performance for the month. General Retailers were down almost 9% while Banks lost almost 5% for the month. Our exposure in these sectors through Standard Bank (-6.6%), Foschini (-13.6%) and JD Group (-13.3%) contributed to the negative overall performance. We believe that valuations are pricing on an extremely negative position on interest rates as well as the impact of the National Credit Act (NCA). While we do believe that there will be a short-term slowdown in credit growth due to the introduction of the NCA, we believe that the longer-term benefits of our growing economy will benefit consumer-focused stocks.

During the month we increased our holdings in Steinhoff by 1% and Anglogold by 2%. These purchases were funded by reducing holdings in Astrapak (-2%) and Astral (-1%).

The fund is on a PE discount of 15% to the market while the price to book is at an 8% discount and the dividend yield is at a 5% premium to the market.

March was a difficult month for the fund relative to the market due to the very strong performance from Resources where we are underweight. The All Share returned a very strong 6.4% for the month driven by an 11% return from Resources and approximately 3% return from Financials and Industrials.

The fund returned 3.2% for the month - although the absolute level of return is healthy, the fund was hurt by poor performances from Amaps (- 12%), Tiger Automotive (-17%), JD Group (-2%), Johncom (flat for the month) and AGI (-1%). There have been some specific reasons for the poor performances e.g. Amaps has been under cautionary regarding the purchase of the Steinfurn furniture business from Steinhoff - a deal we do not like due to the pricing. We have voiced our concerns to management and trust that suggested amendments will be made. For the others, there have not been any specific reasons and we remain comfortable in the valuations and holdings. We are also happy to see some reversal of this negative performance in April.

Looking to the brighter side, Mastermind's top contributors for the month were Raubex (+21%), BHP Billiton (+12%), Gijima (+11%) and Mittal (+7%). Raubex is a new listing in the Construction sector - the company is involved in the building and maintenance of roads in South Africa. We subscribed for shares at R15 and are very happy with the strong return thusfar. During the month we also bought into Astral as its valuation is attractive relative to the Rainbow takeout offer from Remgro.

We remain comfortable with the funds value characteristics: PE discount of 20%, Price to book discount of 5% and dividend yield premium of 5%.

Cadiz buys African Harvest Fund Managers

(12-Sep-2006)
Specialist financial services group Cadiz Holdings announced today that is has acquired African Harvest Fund Managers (AHFM) and African Harvest Collective Investments (AHCI) for R295 million from the African Harvest group of companies.