The Anchor BCI Equity Fund gained 1.0% in September vs the Capped Swix benchmark, which ended the month only 0.7% higher. YTD, the benchmark Capped Swix is up 1.4%, while the fund has gained 3.8%.

The domestic market started the month on a strong footing, with the Capped SWIX Index up over 6% by mid-month and the rand strengthening 4% against the US dollar over the same period, as receding global recession fears and increasing optimism for a resolution to trade wars buoyed global sentiment . However, geopolitical risk conspired to reverse those gains by month-end, with the Capped SWIX Index closing September only 0.7% higher and the rand only 0.3% stronger.

During the month, the fund sold out of long-time, core holding CFR Richemont (CFR), which the team believes wasn’t fully pricing in the negative impact of the ongoing Hong Kong protests on tourist numbers to the region. The Hong Kong market accounts for approximately 12% of CFR’s revenue, and continued growth in Asia was one of the chief reasons for our exposure to CFR. The protests will ultimately come to an end and we’ll assess the impact on the thesis as new data are presented, but for now we have adopted a cautious stance although we remain constructive on the longer-term prospects of the business, especially in light of the YNAP integration.