In the year ended 30 September 2016 Majedie‘s NAV rose by 16.0% on a total return basis whilst the share price rose by 3.0%. The Board is recommending a total dividend for the year of 8.75p per share, an increase of 9.4%. The UK market and MSCI World Index (in Sterling terms) rose by 16.8% and 30.6% respectively, on a total return basis. A large holding in Majedie has been transferred to a new fund management group (Aviva) which is not expected to be a long term investor. The Board is uncomfortable with the level of the discount and is looking at all opportunities to reduce it.
In the year, the main change in asset allocation was a reduction in the MAM UK Equity Segregated Portfolio by GBP3.4m; there were no sales of Majedie Asset Management (MAM) shares during the year. The Board has increased the value of its holding in MAM to GBP57.1m. MAM’s AUM increased to GBP12.3bn from GBP11.2bn during the year, which reflects stock market movement especially in the second half of the year.
Their UK assets are invested in a segregated portfolio that is managed in parallel to the MAM UK Equity Fund. In the year to 30 September 2016 the Segregated Portfolio returned 14.4% net of fees, which is an underperformance of 2.4% against its benchmark. The positive contributors at a sector level over twelve months were overweight positions in Mining, Support Services and Oil whilst the negative contributors were overweight positions in Banks, Tobacco and Fixed Line Telecoms.
The MAM Tortoise fund returned 17.5% net of fees in the year to 30 September 2016. The positive contributors at a sector level were long positions in Mining, Oil and Software whilst the detractors were long positions in Banks and short positions in REITs and Distributors.
In the year to 30 September 2016 the MAM UK Income Fund returned 2.6% net of fees, which represents an underperformance of 14.2%. The positive contributors at the sector level were overweight positions in Travel and Leisure, Food Producers and Nonlife Insurers whilst the detractors were overweight Life Insurers and underweight Oil and Mining.
The Global Equity and Global Focus funds returned 28.7% and 22.6% net of fees respectively, which represents an underperformance of 1.9% and 7.9% of their benchmarks. The absolute returns of the funds have benefitted from the weakness of Sterling though there was no effect in relative terms because the Company is invested in the Sterling share class. The positive contributors at the sector level were overweight positions in Software, Mining and Diversified Financials whilst the detractors were overweight positions in Telecoms, Banks and Biotechnology.
The MAM US Equity fund returned 22.8% net of fees, which represents an underperformance of 10.9%. The company is invested in the Sterling share class. The positive contributors at a sector level were overweight positions in Diversified Financials, Software and Media whilst the detractors were overweight positions in Consumer Services, Leisure and Healthcare Providers.
MAJE : Majedie plans to narrow discount