Cannon Equity Fund Factsheet - Cannon Asset Managers

CANNON EQUITY FUND
JANUARY 2012
CONTACT: Bella Shongwe 0800 CANNON (0800 226 666)
EMAIL: unittrusts@cannonassets.co.za
INVESTMENT OBJECTIVES
The Cannon Equity Fund aims to deliver sustainable growth in capital
through exposure to listed equities over a three-to-five year investment
horizon. Recognising the relatively long-term horizon, we endeavour to
outperform the JSE’s All Share Index (ALSI) on a rolling basis and, in so
doing, deliver returns that ensure real growth in investors’ wealth. The
portfolio manager does not make use of gearing or derivative instruments to
achieve the investment objective. Asset class risk must be managed by
investors outside of the fund.
INVESTMENT COMMENTARY
The FTSE–JSE All Share Index rallied 5.7 percent in January, producing the best
start to the year since 2006. The market rally has been fuelled by a string of positive
economic data releases, as well as positive action taken by the European Central
bank to ally investors’ fears about events in the Eurozone. The Cannon Equity Fund
has begun the year in an equally impressive fashion returning 5.8 percent for the
month. We are encouraged by this strong beginning to the year, which builds on
the good result we had at the end of 2011. However, we are cognisant of the threats
presented by structural changes that are taking place in developed market
economies, as well as the fresh drivers in place in new, dynamic markets. As such,
we expect 2012 to remain a challenging environment for investors. The fund is well
positioned given this backdrop.
A significant contributor to the portfolio’s January performance was Pinnacle
Technology Holdings, which ranks amongst the portfolio’s largest holdings. The
stock price gained 18.5% during the month, on the back of a remarkably positive
trading update. Pinnacle is the largest distributor of information technology
products in South Africa, and has all the characteristics that make a great
investment; high quality; a great management team; positive momentum in terms
of earnings growth and stock market activity; and, most importantly, very attractive
value multiple. As noted, the company released a positive trading update, stating
that headline earnings are expected to be at least 45 percent higher than the results
of the comparative period last year.
The Cannon Equity Fund remains committed to investing in high quality
companies, with sound leadership, healthy prospect and that offer deep valuation
discounts, of which Pinnacle Technology Holdings is such an example.
PERFORMANCE METRICS
Fund Benchmark
Return Since Inception (% cumulative)
Return Since Inception (% annualised)
150.04
14.04
183.73
17.14
High Water Mark (cpu) 247.84 286.02
Low Water Mark (cpu) 98.78 100.00
% of Positive Months 61.54 58.97
CANNON EQUITY FUND VS ALSI (J203T)
Performance Annualised Benchmark Cumulative Benchmark
1 Year 5.08% 10.83% 5.08% 10.83%
2 Years
3 Years
11.15%
18.13%
15.64%
21.20%
23.54%
64.85%
33.71%
78.06%
Volatility
1 Year 15.19% 18.50%
2 Years
3 Years
13.90%
15.98%
17.78%
19.61%
Correlation
1 Year 0.73 1.00
2 Years
3 Years
0.74
0.73
1.00
1.00
FUND FACTS
Fund Manager
Dr Adrian Saville
Classification
Domestic Equity - General
Universe (Benchmark)
ALSI (J203T)
Objective
Capital Appreciation
Risk
Aggressive
Year End
December
Fund Inception 01 July 2005
Fund Size
R80 million
Lump Sum (Minimum) R10 000
Recurring (Minimum)
R500
Current Unit Price
219.35cpu
Total Expense Ratio 1.48
Please note: the TER has been calculated using data from 1 st October 2010 till 30 th
September 2011. The TER is disclosed as % of the average Net Asset Value of the
portfolio that were incurred as charges, levies and fees related to the management
of the portfolio and underlying portfolios.
A higher TER ratio does not necessarily imply a poor return, nor does a low
TER imply a good return. The current TER cannot be regarded as an indication
of future TERs.
Income Declarations 30 June & 31 December
Income 7 January 2010 1.83cpu
7 July 2010 0.68cpu
7 January 2011 2.23cpu
7 July 2011 0.55cpu
FAIS CONFLICT OF INTEREST DISCLOSURE
Please note that in most cases where the Broker is a related party to Cannon Asset
Managers (Pty) Ltd and /or Metropolitan, Cannon Asset Managers (Pty) Ltd
and/or distributor earns additional fees apart from the Broker’s client advisory
fees. It is the Broker’s responsibility to disclose additional fees to you as the client.
Such fees are paid out of the portfolio’s service charge and ranges between (excl
VAT)
Annual
Upfront
Metropolitan Up to 0.35% Up to 0.25%
Cannon Asset Managers (Pty) Ltd Up to 0.925% Nil
Maximum Broker Fee Up to 0.50% Up to 3.00%
Total Service Charge 1.25%
CANNON EQUITY FUND vs ALSI (J203T)
1 JULY 2005 = 100
340.0
290.0
240.0
190.0
140.0
90.0
ALSI (J203T)
Cannon Equity Fund
Jun-05 Mar-06 Dec-06 Sep-07 Jun-08 Mar-09 Dec-09 Sep-10 Jun-11
Source: Moneymate as at 31 January 2012
www.cannonassets.co.za

CANNON EQUITY FUND
JANUARY 2012
CONTACT: Bella Shongwe 0800 CANNON (0800 226 666)
EMAIL: unittrusts@cannonassets.co.za
SECTOR ALLOCATION
TOP TEN HOLDINGS
Basic Materials
Financials
Industrials
Oil & Gas
Consumer Goods
Technology
10.30
7.53
7.08
19.15
21.51
28.37
Sasol Ltd 10.30
Anglo American Plc 10.27
Exxaro Resources Ltd 6.48
Old Mutual Plc 6.29
AECI Ltd 6.07
African Rainbow Minerals 5.54
Pinnacle Technology 4.81
Steinhoff Int Hld Ltd 4.80
Aveng Limited 4.24
Lewis Group Ltd 3.93
Consumer Services
5.89
TOTAL 62.73
Cash
0.18
ADMINISTRATION
If your complaint has not been resolved to your
satisfaction, kindly contact our Complaints
Resolution Committee: Tel: (021) 940 5880,
Fax:(021) 940 6205
Email: emoruck@metropolitan.co.za or metunit@metropolitan.co.za
Custodian: Standard Executors & Trustees: Tel (021) 401-2286. Metropolitan Collective
Investments Limited PO Box 925 Bellville 7535 Tel (021) 940-5981 Fax (021) 940-5885 Call
Centre, Tel: 0860 100 279 Registration No 1991/03741/06
Collective Investments are generally medium to long term investments. The
value of participating interests may go down as well as up and past
performance is not necessarily a guide to the future. Collective Investments are
traded at ruling prices and can engage in scrip lending. Forward pricing is
used. A schedule of fees and charges and maximum commissions is available
on request from Cannon Asset Managers. Commission and incentives may be
paid and if so, are included in the overall cost. This fund may be closed to new
investors. Graphs and performance figures are sourced from Morningstar for
lump sum investments including income distribution, at NAV to NAV basis
and do not take any initial fees into account. Income is reinvested on the exdividend
date. Actual investment performance will differ based on the initial
fees applicable, the actual investment date and the date of reinvestment of
income. Collective Investment prices are calculated on a net asset value basis
and auditor’s fees, bank charges and trustee fees are levied against the
portfolio. The portfolio manager may borrow up to 10% of portfolio NAV to
bridge insufficient liquidity. The performance fee FAQ document is kept as a
public document at Metropolitan Head office. Metropolitan Collective
Investments Ltd is a Full member of the Association for Savings & Investments
SA (ASISA). The reason that we are no longer FAIS registered is that CIS
managers are exempt from FAIS as we are regulated by CISCA and the FSB.
FURTHER CONTACT DETAILS
Cannon Asset Managers (Pty) Ltd
First Floor, Building B,
Bryanston Corner,
18 Ealing Crescent
Bryanston, 2194.
PO Box 70997,
Bryanston, 2021
Unit 2 Rydall Vale Crescent,
Rydall Vale Park,
La Lucia Ridge, 4019.
PO Box 5200,
Rydall Vale Park, 4019.
Authorised Financial Services Provider #736.
www.cannonassets.co.za