Welcome! Emperor Asset Management's First Unit Trust

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Unit trusts are popular investment vehicles which have gained the trust of South Africa’s masses and now Emperor Asset Management is proud to announce the introduction of our first official unit trust. The Emperor IP Momentum Equity Fund, created via a partnership with third party management company IP, is a quantitative momentum based fund designed to deliver excellent performance (alpha) at the lowest possible risk.

Before I go on to explain the definition of a quantitative strategy, our fund’s key differentiators and its benefits to your portfolio, it is important to know that this is a brief description of the fund and that more details can be provided by one of our FSB (Financial Services Board) approved sales people via our contact details.

What exactly is a Quantitative Fund Strategy?

To break it down into the most simplistic explanation I can provide; a quantitative fund strategy is a set of well-defined rules which instil discipline into the methodology of picking the shares which make up the fund’s portfolio. This rule set is built into computer technology and tested on the historical price movements of the 180 most liquid JSE shares dating back over 10 years up till the current year; after which the rule set is tested in real time to ensure the strategy/system delivers its intended results.

The ultimate advantage of using quantitative strategies is the removal of human bias and error and naturally a hard coded unfaltering discipline in selecting shares according to a strategy which possesses massive confidence in meeting its promises, as the strategies are rigorously tested in real time (prior to its launch) as well as over historical data.

Key Differentiators in our Client Offering:

  1. An optimised strategy: The Emperor IP Momentum Equity Fund utilises our most advanced strategy to date as it possesses dynamic functionality whereby we are able to maximise returns in times of growth and minimise loss in times of panic. This is done in several ways as this fund exploits all Emperor Asset Management’s intellectual assets, which are listed below.
  1. Intellectual Property: Emperor Asset Management is a company in the habit of investing heavily into the creation and development of its intellectual property. The fund makes use of the following tools in order to deliver investment excellence:  
    • Momentum Indicator: This proprietary indicator is responsible for delivering extraordinary outperformance and forms the basis of our flagship Robert Falcon Scott (RFS) strategy. The RFS strategy is testament to just that as it has earned our clients 22.8% annual average returns in the last 10 years of operation relative to the FTSE/JSE Top 40 at 15.1%- as at 31 October 2014.
    • Market Timing Model: All our products make use of a successful tried and tested market timing model which predicts potential recessions by analysing market valuations and sentiment. This model allows us to confidently convert equity exposure into cash strategically before a market correction or crash and back into equities as the market recovers and grows thereafter.
    • Dynamic Protection:  This new addition to our range of intellectual property allows us to preserve client capital as the market falls by using our proprietary quantitative dynamic protection systems. The fund will incorporate more effective diversification in weak markets while simultaneously moving out of aggressive momentum positions and into less volatile and defensive positions. The dynamic protection has been thoroughly tested and is truly successful in balancing the abnormal returns produced in momentum strategies by reducing volatility, downside capture and beta to levels which best the fund’s benchmark.
  1. Client Fees: This unit trust has taken on a fee structure which is designed to give the client confidence in the fund’s ability to beat its benchmark (the FTSE/JSE Top 40). This is done by charging a monthly: 
    • Management Fee: of 1.5% p.a. only paid by the client on condition that the fund’s returns were greater than or equal to that of the FTSE/JSE Top 40 on a rolling two year period.
    • Performance Fee: of 20% of the outperformance only. For example if the fund earns 30% in a year and the FTSE/JSE Top 40 earns 20% for the same year, the outperformance will be 10% and we will share in 20% of that 10% outperformance.

Tremendous value is given to clients using this structure as in the event of this unit trust underperforming: no fees will be charged to clients thus, further protecting capital in times of poor performance.

  1. Back Testing Model:  Back testing is the process of testing a strategy on historic market/share data. Back testing plays a massive role in confirming that a strategy is ready for public release and that the strategy will yield the intended results to its investors. This is performed by programming the strategy into a computer as a set of rules and testing the strategy as if it had been implemented at a past date, we usually use 01 January 2002. The findings of our back test can be found in the fund’s simulated factsheet.

Emperor IP Momentum Equity Fund Highlights:

  1. Tax efficiency to long term investors. As a unit trust, long term investment returns will be liable for Capital Gains Tax.
  2. Targeted at investors seeking maximum returns which consistently beat the FTSE/JSE Top 40, from a pure equity investment, at the lowest risk possible.
  3. The fund provides investors’ portfolios diversification/exposure into a protected momentum strategy yielding high returns at low risk- if that sounds like something you need, our team is a call away.

LEARN MORE

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