Another strong set of results for Coronation
20 May 2014 - Coronation Insights
- Assets under management of R547 billion.
Diluted headline earnings per share of 275.4 cents.
Interim dividend per share of 275 cents.
JSE-listed asset manager Coronation Fund Managers (Coronation) today reported another strong set of results for the six months to 31 March 2014, benefiting from the continued strength in equity markets and strong inflows.
The business stated that continued good investment performance and a further increased asset base led to a 56% rise in revenue to R2 308 million for the six-month period. This resulted in an increase in diluted headline earnings per share of 69% to 275.4 cents (March 2013: 163.4 cents). Profit from fund management grew by 67% to R1 291 million (March 2013: R774 million).
Coronation is a pure fund management business that offers local and international mandates to South African and global institutional investors, as well as retail investors. For the period under review, it attracted total net inflows of R14.7 billion, which includes direct flows into international products of R8.9 billion. Total assets under management increased by 11% to R547 billion (September 2013: R492 billion), of which international assets under management represent R105 billion (September 2013: R85 billion).
"With solid investment performance across our unit trust fund range, we continued to attract exceptional investor support from retail investors, recording net flows of R17 billion during the six-month period. Our share of the long-term retail market in South Africa has now increased to 14.5% from 13.6% in September last year," Anton Pillay, CEO of Coronation Fund Managers commented.
The total institutional business recorded net outflows of R2.3 billion for the six-month period attributed mainly to the required rebalancing of client portfolios and the South African equity and multi-asset class products being closed to new investors. The international pooled and segregated mandates, however, attracted net positive inflows of R6 billion.
"As a long-term manager our focus is on producing consistently strong returns for our clients over five years or longer. The strength of our ability to generate outperformance, or alpha, is best illustrated by our longest running equity portfolio, Houseview Equity, which produced nnualised outperformance of 3.5% before fees for more than 20 years since inception in October 1993." In addition, the Global Absolute portfolio delivered alpha of 5.5% (before fees) per annum since inception in August 1999.
Having established an excellent track record since inception in July 2008, the Coronation Global Emerging Markets Fund has outperformed its benchmark by 8.9% per annum (before fees), placing the fund 2nd in a global peer group of 64 funds as at end March 2014 (Source: Bloomberg data net of fees). Equally compelling, the Coronation Africa Frontiers Portfolio outperformed its benchmark by 11.9% annualised (before fees) since inception in October 2008.
The past six months mark yet another exceptional period for the business and for our clients. While equity markets have continued to be strong, the absolute levels of return are not sustainable and we caution investors to re-set their expectations for the years ahead. Coronation is a cyclical business and we envisage a difficult investment environment with increased market volatility. Going forward our focus remains fixed on creating long-term value for all our stakeholders,” Pillay concluded.
Coronation Fund Managers
Anton Pillay 021 680 2480
Louise Pelser 021 680 2216
076 282 3995
Johannes van Niekerk 082 921 9110
Developed markets continued to outperform emerging markets (9.6% for the MSCI World Index versus 1.5% for the MSCI Emerging Markets Index, both in US dollar terms) for the six months under review. During this period the South African equity market delivered a US dollar return of 4.7% (10.1% in rand terms). The rand remained one of the worst performing emerging market currencies, losing 4.8% against the US dollar and 6.6% against the euro to close at R10.54 and R14.51 respectively.
Coronation’s domestic and global balanced portfolios both ranked in the 1st quartile over 5- and 10-year periods in the respective Alexander Forbes SA Large Manager Watch™ and Global Large Manager Watch™ surveys to end March 2014.
All domestic and international flagship funds ranked in the 1st quartile of their respective Morningstar categories since launch to end March 2014, highlights of which include:
Coronation Top 20 has outperformed its benchmark by a strong 6.2% p.a. (after fees) since launch in October 2000.
Coronation Balanced Plus, the no. 1 multi-asset high equity fund in South Africa since launch in April 1996, has outperformed its average competitor by 2.8% p.a. (after fees) over the same period.
Coronation Capital Plus has delivered a return ahead of inflation of 8.4% p.a. (after fees) since inception in July 2001.
Coronation Balanced Defensive, the no. 1 multi-asset low equity fund in South Africa since inception in February 2007, has outperformed inflation by 4.8% p.a. (after fees) over the same period.
Coronation Strategic Income, the no.1 multi-asset income fund since inception in July 2001, has outperformed cash by an average of 2.9% p.a. (after fees) over the same period.
Coronation Global Opportunities [ZAR] Feeder (formerly Coronation World Equity [ZAR]), has outperformed theglobal equity market by 1.6% p.a. (after fees) since launch in August 1997.
Coronation Global Managed [ZAR] Feeder, the no. 1 global multi-asset high equity fund in South Africa since inception in October 2009, has outperformed its benchmark by 1.7% p.a. (after fees) over the same period.
For the second consecutive year, Coronation was named both Raging Bull South African Management Company of the Year and Morningstar Best Large Fund House.
Any information being provided herein (the "Information") including information relating to the Coronation range of funds (the "Funds") are not designed for use in any jurisdiction or location where the publication or availability of the Information would be contrary to local law or regulation. If you have access to the Information it is your responsibility to be aware of and to observe all applicable laws and regulations of any relevant jurisdiction and it is recommended an investor first obtain appropriate legal, tax, investment or other professional advice prior to acting upon the Information. Coronation Asset Management (Pty) Limited (regulated by the Financial Services Board of South Africa) or one of its affiliated entities (together "Coronation") is the investment manager to the Funds. Coronation Asset Management (Pty) Limited is a subsidiary company of Coronation Fund Managers Limited, a company incorporated in South Africa and listed on the JSE (ISIN: ZAE000047353). The Information is for information purposes only and does not constitute or form part of any offer to the public to issue or sell, or any solicitation of any offer to subscribe for or purchase an investment in the Funds, nor shall it or the fact of its distribution form the basis of, or be relied upon in connection with, any contract for investment in the Funds. Any such offer shall only be made pursuant to the offering material regarding the Funds. The Funds are subject to management, administration and performance fees. Past performance is not necessarily a guide to future performance. Investors may not receive back the full amount invested and may suffer capital loss. Investments in the Funds may not be readily realisable. Opinions expressed in this document may be changed without notice at any time after publication. Nothing in this document shall constitute advice on the merits of buying and selling an investment. All income, capital gains and other tax liabilities that may arise as a result of participating in this investment structure, remain that of the investor.