The fund advanced 10.5% in December to end the year on a very positive note. Key contributors over the month were Hulamin (+80%), York (+58%), African Rainbow Capital (+46%), Nampak (+29%) and Caxton (+22%). The fund’s offshore equities also had a good month gaining just over 5% in dollar terms. However the rand’s unexpected 5% rally during December negated the USD gains and the net result was a zero sum game in rand terms. The year-end euphoria was not limited to equities, as commodity prices saw further broad based gains. Iron ore was a feature, but oil, copper and many others pushed notably higher. Precious metals also benefited from dollar weakness, higher forecast global inflation and investment demand. The gold price was up nearly 7% and our long held positive view on platinum was finally rewarded as this unloved precious metal rose 11% in USD over the month.

So, after a terrible first few months of the year as the pandemic struck, with the fund price down in excess of 35% at one stage, we ended the year with a small 2.6% negative return - still disappointing and moderately below benchmark as value funds in general underperformed, but a great deal better than looked possible just two months ago. We expect value stocks to continue their recent outperformance after languishing for most of the last 12 years since the Global Financial Crisis. As required by legislation, we confirm that the fund has adhered to its policy objective and strategy.