Webinar: US powers ahead, SA lags as Ramaphoria fades

LONDON — Very different stories for the portfolios during the month of June. The Biznews US Exponential portfolio powered ahead to a 25% gain since launch in November last year as investors celebrated a stronger economy and lower tax rates. But the SA Champions portfolio sagged on the fading of Ramaphoria as the reality of the damage done during the Zuma Era sank in. In the past month, the Exponential Portfolio's value rose from mid May's $122,500 to $125,178. It was created with a seed investment of $100,000 in November last year. The performance has been based on stock selections, led by Amazon, beating the overall market by some distance. The SA Champions portfolio, however, was hit by a continued slide in South Africa Inc stocks, with its overall value dropping to below the R100,000 starting capital for the first time in months. The portfolio is down 0.6% since inception in January 2017. During this period the JSE All Share index has risen 9.9%, boosted by the impact of improving commodity prices on resource stocks.- Alec Hogg.Highlights of the past month:.Amazon.com – The cornerstone of the Exponential portfolio, Jeff Bezos's creation has now completely shrugged off the poorly veiled attacks from the White House. Although unrelated to Amazon, founder Bezos also owns the Washington Post newspaper, the harshest critic of US president Donald Trump. During the month Amazon's share price broke through a new barrier, closing above $1,700 a share for the first time, taking its market capitalisation to $827bn – now the second most valuable company in the US, above Alphabet ($791bn) and surpassed only by Apple ($$937bn)..Adobe Systems – The Nasdaq listed software house was added to the portfolio in the month, replacing Facebook which continues to be dogged by controversy. Although the scandal around Facebook's abuse of its customers' data has had little effect on investor perceptions, we prefer to look elsewhere for a longer-term home. Adobe, creator of the ubiquitous PDF and Photoshop looks perfectly positioned to fulfil this role. A lot of detail was shared during the webinar on the reasons for the purchase, including the power of its subscription model, an $8bn share buyback programme, and growing appreciation of the value of its user-processing data offering. Adobe was preferred above Twitter and Netflix, both of which have been on the radar for inclusion..___STEADY_PAYWALL___.Naspers – The biggest holding in the SA Champions portfolio continued its rebound after the recent sell-down. This followed differences between the intentions of the managers and what some shareholders wanted it to do with $10bn raised by reducing its Tencent holding from 33% to 31%. Naspers issued a trading statement which forecast core profits to end March will rise over 70%, supported by a similar surge at Tencent. .Discovery – The share price of the other large holding in the SA Champions portfolio continued to slide along with the JSE's Life Index. Investors have been selling SA financial stocks as Ramaphoria wears off, particularly in the wake of a 2.2% contraction in GDP during the first quarter. During the webinar we explained in some detail why this is not justified – ie that Discovery's shared value positions it very differently from other members of the JSE's Insurance Index.

Webinar: US powers ahead, SA lags as Ramaphoria fades

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