Coronation sees more value in SA assets. Following their relative underperformance over the past year, the fund manager

says the major SA asset classes present opportunities to long-term, valuation-

driven investors.

Coronation Fund Managers says the major SA asset classes are presenting above-

average opportunities to long-term, valuation-driven investors, such as

itself. That's after a period of very disappointing returns, which reflect in

the asset manager's latest financial results. The outlook for global asset

classes is more mixed, it says, which has enabled it to construction

"differentiated portfolios".

While the JSE returned just 3.3% over the year to end-September and emerging

markets delivered a negative return of 0.8%, Coronation says developed markets

were up 9.8% on average. Over the same period, the rand weakened by 4.3%

against the US dollar.

Coronation's SA equity and Global Emerging Markets equity portfolios

underperformed over the year - although it says the long-term performance

across its fund range remains excellent. Other strategies, such as its Fixed

Interest and Frontier Markets portfolios did a lot better.

Institutional assets under management (AUM) fell 8% over the year to 346 rand

billion as local institutional portfolios recorded net outflows of 22.6 rand

billion. It says this outcome was significantly better than expected, given

that the local institutional savings market continues to see structural net

outflows and Coronation's SA Equity and Multi-Asset strategies only reopened

to new institutional clients in March 2017. Global client portfolios fell 14%

to 61 rand billion.

In its retail business, Coronation experienced net outflows of 4.1 rand billion,

compared to 6.9 rand billion a year earlier. Retail assets still grew 1.3% to 241 rand

billion.

Total AUM declined by 4.4% to 587 rand billion from a year earlier but were almost

unchanged from levels at the end of March. Although average AUM increased by

3.1% over the period, revenue declined by 1.8% to 3.8 rand billion for the year.

Headline earnings per share declined by 4% to 420.7c. It's paying a final

dividend of 197c, taking its total dividend for the year to 420c per share.

We remain optimistic that the current positioning of our strategies will

generate higher future returns for our clients," Coronation said. "Together

with our increased investment in our infrastructure, technology and people

over the past year to support the provision of world-class service to our

clients, we believe this will ensure the delivery of sustainable long-term

value for all stakeholders."

The fund manager's shares shed 1.4% to 44.26 rand yesterday.

> CML results put it on a DY of over 9%#JSE

>

> -- Simon Brown (@SimonPB) November 20, 2018

> Might come down to preference & risk appetite. Personally I like longer

track record of $JSECML. Yes @DrieksCombrinck, Global AM's were under pressure

in 2018. If you look at CML MktCap/AUM% relative to biggest AM's %, you will

note that CML became even cheaper. pic.twitter.com/sZsP7Y5Szr

>

> -- Schalk Louw (@SchalkLouw) November 20, 2018