JOHANNESBURG – For the year to date, the all share index is down 7.5 percent – in US dollar terms a staggering 29 percent.
You could argue that a good way of hedging yourself would be to buy a pure rand hedge, but of course the underlying of the rand hedge must not lose value.
One share that could be considered is Astoria. On Friday they released a Sens stating the net asset value (NAV) of Astoria is $1.20 (R17.70). Exactly one year ago the NAV was$1.16 and on September 30, 2016, it was $1.03.
Astoria is a global investment company, with its primary listing (and registration) in Mauritius, and listings in Namibia, and on the JSE.
The company's primary objective is to achieve strong dollar capital appreciation over the medium to long term by investing in global, equity-dominated holdings of primarily direct, high-quality listed businesses, mainly in developed markets.
This strategy is enhanced, where appropriate and for niche opportunities, by investing in exchange-traded funds, other funds and global private equity opportunities.
Anchor Capital's experienced investment team manages Astoria and judging Anchor's local success (in the top equity funds), and the growth in the Astoria NAV, there is nothing wrong with what they do. They pride themselves on being genuine long-term fund managers and not chasing monthly league tables. Although criticised with the costs, it is nothing more than a run of the mill offshore unit trust with a Total Expense Ratio (TER) of 1.6 percent per annum (all-in cost). I know many unit trust funds with much higher annual fees.
When Astoria listed late in 2015 there was a lot of hype around rand hedges, reiterated by Nenegate soon after that. The share price shot up to trade way beyond the NAV, but during 2016 this situation reversed and JSE investors started having a problem with investments trusts in general, the fees that they charge, and their success rate. Think Brait and New Look, and Remgro’s venture to the UAE to set up Mediclinic for failure with Al Noor.
Astoria’s assets are represented by three distinct categories: direct listed global equities, niche funds and private equity and cash.
According to the 2017 annual report, the asset allocation was 81.2 percent direct listed global equities, 2.7 percent niche funds and 3 percent private equity.
The cash holdings remained high at 13 percent at year-end, inclusive of fund commitments to private equity. Direct listed global equities ended the year with a 28 percent return, which compares favourably with global markets’ performance of 23 percent, as measured by the MSCI World Index.
The Top 10 holdings are Echo Polska Properties, European Wealth Group, Facebook, The Blackstone Group, Admiral Group, Apple, Hastings Group Holdings, Home Depot, Starbucks, and JPMorgan Chase.
Astoria is trading under a cautionary; it is known that RECM and Calibre are trying to acquire all the issued shares of Astoria other than the 35 million they already hold. Friday’s Sens announcement also stated that most of Astoria’s NAV comprise liquid investments. Astoria is engaging with major shareholders regarding their support for a proposal to effect a capital payment to all shareholders, as a route that would unlock value.
Even if this does not realise, Astoria investors can gain exposure to an actively managed foreign portfolio through one JSE listed share.
Amelia Morgenrood is a PSG Wealth financial adviser based in Pretoria. Views are of the author and not necessarily the general view of the entire PSG entity. Astoria shares are held on behalf of her clients.