Magnus Heystek: Value fund manager Piet Viljoen gets his mojo back – #InsideInvesting

Magnus Heystek is an outspoken independent financial advisor. The author and entrepreneur who founded Brenthurst Wealth Management has a strong following for his incisive views. Piet Viljoen was considered something of an investment rock star in his earlier career, with many investors watching his every move to pick up tips on how to generate superior performance. A prolonged period of underperformance dulled Viljoen’s sheen. But it seems like he has got his mojo back, as Heystek tells BizNews founder Alec Hogg in this episode of Inside Investing. – Jackie Cameron

This episode of Inside Investing is proudly brought to you by 4Sight Holdings, your digital transformation partner of choice.

Magnus Heystek on Piet Viljoen:

Piet was a gentleman five years ago, when I pointed out that – he was running one of their Nedgroup funds – [that] the fund wasn’t doing well. It kept on not doing well. As a commentator, one needs to report on these things. I wouldn’t say it was a full go, I just said I couldn’t invest in the fund at that stage because of poor performance. I thought at the stage that Piet’s positioning was not correct. It was not an attack on Piet, it was just an attack on the performance.

On meeting Piet Viljoen:

I’ve got to meet Piet…and we sat down and had a beer about those articles. He was gentleman enough to even pay for the beer. He just kept me informed as to how his funds are doing. What I liked about it, is that Piet never wavered from his position. He said, ‘I’m a value fund manager, I’m not going to change. I’m not going to chase the tech stocks.

On Piet Viljoen’s funds:

I’ve been tracking Piet’s funds. He (now) runs the Counterpoint Value Fund. I started putting some money into Piet’s funds about a year ago. I increased my exposure to his fund earlier this year, when I started seeing an outperformance, relative to all the brand names. I asked Piet. I said, just give me an update on your fund this year, relative to the brand names – Allan Grey, Investec, Ninety One or Coronation – and he sent me a chart which shows he is massively outperforming the brand names, hence I thought, in all fairness, if you’re going to criticise someone for underperformance, you should repay that compliment by talking when he’s outperforming the market. I thought it’s just fair that we talk about his fund, which is doing extremely well at the moment.

On Piet Viljoen’s philosophy:

I had a chat with Piet recently, and he said the philosophy is still simple. ‘I buy cheap stocks. I buy cheap companies. I buy them at a discount to net asset value’. He also buys different styles in one fund. For instance, in his top 10 holdings you’ve got two banks, two gold mining companies – which might appear to be contradictory, but according to Piet it’s not. He’s buying them both. Different fields, a bit of diversification. But they’re both cheap.

What is interesting is that the outperformance this year – and the returns this year have been excellent – is the South African based fund. It’s got no offshore equities in his fund. Maybe the big value/growth/momentum style issue is coming to the fore. It’s a big debate in the States as well. The value vs growth vs momentum. As you well know, the first ten years of this century, the value funds did exceedingly well and the second ten years the value funds did very poor.But maybe, just maybe, we need to start looking at value funds more carefully and start adding them to your portfolio.

This episode of Inside Investing is proudly brought to you by 4Sight Holdings, your digital transformation partner of choice.

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