The objective of this portfolio is to provide above average growth in capital over the medium to long term. Income will be of secondary importance. The risk associated with theis portfolio shall be the same as the risk associated with SA equities as an asset class. Volatility of capital can occur over the short-term.

A strong final quarter across the JSE helped the All Share Index to deliver a return of 12.0% for the calendar year, making it the top performing major domestic asset class. Returns were concentrated in a number of resource and heaveyweight dual listed shares. Over the 12 month period, the general resource, industrial and financial indices delivered returns of 28.5%, 8.9% and 0.6% respectively. Within the resource sector, the platinum and gold mining subsectors delivered very impressive returns of 203% and 108% respectively. Indeed 7 of top 10 performing shares in 2019 were either gold or platinum miners. It should be noted that despite the stellar returns generate by the platinum sector over the past 12 months, the sector has delivered a negative return over the past 10 years. Even the broader resource index, with a 10 year annualized return of 3.3% has failed to deliver returns in excess of cash.

The past 24 months, largely precipitated by the Steinhoff collapse, has seen a number of JSE listed (often well regarded) management teams disppoint investores. Whilest clients have managed to avoid the wors of these fallouts, it has further emphasized the need for a detailed internal understanding of a company culture, capital allocation policies and Environmental, Social and Governance (ESG) practices. It is insufficient for the market's perception of a company management team to be taken at face value (and often where disappointments arise).

There is no change to our positive views on the return outlook for the JSE which we outlined in our prior quarterly letter given attractive overall valuations combined with recent changes in client portfolios which we beloieve have enhanced the overall quality of portfolios. Key themes that shaped equity markets in 2019 such as Brexit, US China trade relations, and central bank policies on the global front and Eskom and possible sovereign rating downgrades on the local front look set to continue into 2020. As always being long-term oriented equity managers our focus is on choosing the best possible combination of companies to weather all possible business and economic challenges and ultimately drive shareholder and client returns.