Introduction to selecting the right type of shares for your trading portfolio

1. Selecting short list of shares
JSE Webinar
02/10/2014

2. INTRODUCTION TO VPC – ASSET MANAGEMENT
Our Investment Philosophy
“As private client/retail investors, we are more agile than institutional investors.”
… we prefer to invest in counters that consistently outperform, and preferably attempt
to enter into these positions when they experience short term pullbacks.
… We are unashamedly 'Bottom-Up Investing‘
“An investment approach that de-emphasizes the significance of economic and market
cycles. This approach focuses on the analysis of individual stocks. In bottom-up
investing, therefore, the investor focuses his or her attention on a specific company
rather than on the industry in which that company operates or on the economy as a
whole.”
… Our philosophy is simple: We invest in shares that show consistent business and
share price performance.

3. |Alpha| Multi Strategy
Multi Strategy portfolio using a variety of
trading and investment strategies across
instruments and markets.
Objective:
Take advantage of different trading
opportunities within the equity and derivative
markets using a variety of analytical tools,
namely Technical and quantitative analysis
and backed up by fundamentals.
Current Portfolios
Diversified portfolios
Accelerated Growth
Income & Growth
Alpha
Generation Alternative
Asset
Management
3
"Higher risk portfolio that aims to deliver superior,
momentum based outperformance over the
medium to longer term, with a strong focus on
active management and stock-selection.“
Objectives
Aim to beat the total return of the JSE Top 40
Aggressive long term price/capital appreciation.
"A moderate risk fund that aims to deliver superior
growth over the medium to longer term, with a
significant dividend sweetener.“
Objectives
Aim to beat the total return of the JSE Top 40
L/T capital appreciation, coupled with yield
enhancement.
Emerging Companies
“We are able to benefit from in-depth analysis on
companies that may be insufficiently researched
by the market, potentially allowing us to invest in
companies that are yet to see significant upside.“
Objectives
Aim to beat the total return of JSE Small Caps
Potentially outperform large cap stock portfolio
significantly over the long term, through the
potentially exciting returns available in a well
selected small cap portfolio.
Vunani Global Titans Portfolio
The Vunani Global Fund utilizes ETFs based on major
indexes across the globe whose weightings are
strategically allocated based on the prospects of that
region. The balance of the fund is invested in
approximately 12 blue chip shares.
Objective:
Provide South African investors global exposure to
major currencies and global blue chip shares.
Vunani IP Accelerated Growth Fund
Our flagship equity Unit Trust available to all investors.
Focussing on long term capital appreciation through
active stock picking of shares the asset management
team believe will appreciate at an above average rate.
Objective:
Consistently outperform the JSE Top40 Index by
investing in shares that have consistent business and
share price performance.
Sharia
"Higher risk portfolio that aims to deliver superior,
momentum based outperformance over the medium to
longer term, with a strong focus on active
management and stock-selection within a sharia
compliant framework“
Objectives
Aims to beat the total return of the JSE Sharia Top 40
|Alpha| Long/Short
Aggressive trading portfolio in both listed and
OTC instruments linked to the South African
equity market.
Objective:
Provide an aggressive trading portfolio for
retail clients.

4. ASSET & WEALTH MANAGEMENT
1 Total Return
Our Investment Process
“We attempt to take advantage of stocks that have the ability to consistently outperform, backed up
by our own valuation metrics and calculations”
model
Select consistent market leading stocks by
business and share price action…
2 Multifactor
ranking model Active quantitative analysis …
3 Tactical
analysis Inclusion of exogenous variables …
4 Qualitative
analysis Quality of management and strategy …

5. • Look for stocks that provide a Total Return
(Dividends + capital growth) over 3 years and 5 years
of over 20% annualized
• Usually coupled consistent share price performance.

6. The models focus on the following fundamental metrics:
•Profitability through operating cash flows and net income.
•Increasing ROA, ROC and ROE.
•Expanding margins.
•Growth in DPS
•Increasing Earnings and Revenue.
•Consistency of growth in EPS

7. Understand the economy and financial environment:
•Focus on industry specific, regional, and international
influences that might impact a company's profits.
•Exchange rates (especially USDZAR)
•Interest rates
•Government policy/regulation
•Commodity prices
•Investor sentiment
•Overseas economies and markets relevant to the
business

8. Kick the tires … Live vicariously

9. VPC ASSET & WEALTH MANAGEMENT
The end result
Top 5 Holdings
VPC's Top 5 holdings by portfolio. As a portfolio guideline for our trading clients.
The table below includes the 5 largest holdings, ranked by portfolio weightings, in our Vunani Private Clients Model Equity Portfolios. The shares are selected
by the portfolio managers based on their investment objectives. Individual fund factsheets are available on the Vunani Private Clients website.
Accelerated Growth Income & Growth Emerging Companies Sharia
Top 5 Portfolio Holdings
ASPEN 6.28 NETCARE 7.55 MEDI CLINIC 6.98 MONDILTD 7.47
MEDI CLINIC 6.07 ASPEN 6.29 BRAIT 6.81 LIFE HEALTH CARE 6.92
MTN GROUP 5.58 MTN GROUP 6.06 TORRE 6.50 MPACT 6.80
OMNIA 5.55 BIDVEST 5.35 SUPER GROUP 6.10 SASOL 6.57
STEINHOFF 5.44 SAB 5.32 AFRIMAT 6.08 SUPER GROUP 6.54
28.92 30.56 32.46 34.30

10. Client focused, integrated, authorised Financial Services Provider
focusing on client needs and value-added services, leveraging off
the experience housed in our three divisions: Stockbroking, Assets
Management and Wealth Management coupled with the
experience and expertise of the greater Vunani Group
An Authorised Financial Service Provider (FSP 564)
Directors: Mark Weetman (Managing), Aphrodite Judin
Company Reg: 1999/008361/07
Vunani Office Park,
151 Katherine Street, Sandton, 2196
P.O. Box 652419, Benmore, 2010
Tel: +27 (0)11 263 9500, Fax: +27 (0)11 884 8458
Email: info@vunaniprivateclients.co.za,
Website: www.vunaniprivateclients.co.za