Welcome to our July newsletter. It’s hard to believe that the year has flown by so quickly and of course brought the winter chill. We hope that you find our short monthly news clips both interesting and informative!

Fund Focus

This month we focus on the Nedgroup Investments Rainmaker Fund.

The fund is managed by Tim Allsop. Tim is the primary founding member of Abax Investments (previously Polaris Capital). He has had a career in the South African equity market that spans nearly 20 years from accounting articles, to investment research at stockbrokers Simpson McKie (HSBC today), to fund management at Syfrets Managed Assets and African Harvest Fund Managers. He has successfully managed the FTNIB Prime Select, the African Harvest Rainmaker and the combined entities now known as the Nedgroup Investments Rainmaker Fund. 

The Nedgroup Investments Rainmaker Fund seeks to offer investors long-term capital growth through active stock selection within the South African equity market. A minimum of 75% of the portfolio's assets will be invested in domestic equities at all times.

The fund is suitable for investors seeking exposure to the domestic equity market with maximum capital appreciation as their primary goal over the long term. Investors should have a tolerance for short-term market volatility in order to achieve long-term objectives.Fund manager

The Nedgroup Investments Rainmaker Fund has achieved the following historical returns: (Figures supplied by Morningstar as at 31^st May 2011)

Extract from Berkshire Hathaway Inc 1997 Chairman’s Letter

How We Think About Market Fluctuations

A short quiz: If you plan to eat hamburgers throughout your life and are not a cattle producer, should you wish for higher or lower prices for beef? Likewise, if you are going to buy a car from time to time but are not an auto manufacturer, should you prefer higher or lower car prices? These questions of course answer themselves.

 But now for the final exam: If you expect to be a net saver during the next five years, should you hope for a higher or lower stock market during that period? Many investors get this one wrong. Even though they are going to be net buyers of stocks for many years to come, they are elated when stock prices rise and depressed when they fall. In effect they rejoice because prices have risen for the “hamburgers” they will soon be buying. This reaction makes no sense. Only those who will be sellers of equities should be happy at seeing stocks rise. Prospective buyers should much prefer sinking prices.