search menu Home > Sanlam Investments > Our fund range EQUITIES Sanlam Enterprise Fund A UK long/short equity strategy. Run by experienced managers with a 20 year track record of alpha generation. The Fund aims to achieve positive returns on a rolling 12 months basis, with lower risk and low volatility expected, primarily through the use of equities and CFDs. The fund Invests primarily in the United Kingdom. Is a UK-focused long/short Fund References SONIA+4% per annum, irrespective of market conditions, although this is not guaranteed. Sections: 5 reasons to invest Philosophy Investment process Fund commentary Related articles Fund literature Factsheet KIIDs Regulatory Fund information Meet the Sanlam UK Equities Team Chris Rodgers Head of UK Equities View profile Andrew Evans, CFA Fund Manager View profile Mark Boucher Fund Manager View profile Why invest in the fund? 5 reasons to invest Fund philosophy Investment process Gain exposure to interesting stocks & themes within the UK without taking too much market risk Pragmatic investment approach with the flexibility to scale net and gross exposure quickly to suit market conditions Provides portfolio diversification with low correlation, low volatility focussing on capital protection Co-managers have over 50 years’ combined experience of managing long/short strategies Demonstrable track record of attractive risk adjusted returns Past performance is not an indicator of future performance Source: Bloomberg as at 31/08/2021. See below for full and discrete performance. We are seasoned long/short investors and have been managing UK equity together since 2001 Mark Swain, Fund Manager Fund Commentary Monthly Commentary Quarterly Update October 2021 Market/macro backdrop October saw UK equity markets deliver gains with the MSCI UK index producing a sterling total return of 2.3% (Source: MSCI and Bloomberg). Performance The Fund produced a performance of 1.1% in October, taking the Fund’s 2021 year-to-date performance to 5.8% (source: Bloomberg). The main feature of October was that our short positions have started to provide a meaningful impact to the Fund again. Over the last few months we’ve been talking about the equity market being more finely balanced, and we’re starting to see the evidence of that as over-valued stocks are being punished if they disappoint on numbers. This is something that we haven’t seen in the last 12 months. Past performance is not a guide to future performance. Total return, NAV to NAV basis, net of charges. Positive and negative contributors A short in an online retailer of electrical appliances and white goods was the biggest positive stock-level contributor as it warned that year-on-year revenue growth had slowed dramatically in Q2 and cut its full year revenue and EBITDA guidance. Analysts followed suit by slashing forecasts and the shares ended down 33% on the month. A retailer of short-haul beach holidays could only a provide a qualitative trading update given holidays had remained ‘off-sale’ throughout the summer but further news on their on-going dispute with Ryanair once again raised questions about the ‘screen scraper’ business model. We have had a long-running structural short in an educational publishing business and not for the first time, the October update warned that US Higher Education was declining faster than management hoped. Despite the 15% fall in the share price, it still trades on 16x December 2022 earnings which doesn’t look particularly cheap for a company continuing to lose market share. Another positive in the short book was our position in a D2C e-commerce company which also featured last month as investors began to question the very high valuation being attributed to its technology services division. The Capital Markets Day and specifically the management’s Q&A session did little to allay those concerns and we subsequently closed our short which in hindsight was a little early. Highlights in the look book included: Watches of Switzerland as it recovered strongly from the ‘growth’ sell-off at the end of September, hydrogen stocks Ceres and ITM Power and long-term structural growth leaders Ashtead and Intermediate Capital. The main drags came from our long position in S4 Capital on a broker downgrade to hold, a short in a global bank as it is seen a beneficiary of rising rates (although this was offset by our long position in Barclays) and better-than-expected results from a global pharmaceutical maker where we were short. We have since reduced the position. Significant portfolio changes - buy/sells A new long position was added in Next as the shares pulled back after the very impressive results the previous month and we funded this by selling our longs in Travis Perkins and JD Wetherspoon, thus maintaining our overall exposure to the UK consumer. We switched a short position in a brick maker into one of its peers on relative valuation grounds and added a new short in a company specialising in software and IT consultancy services for industry as forecasts that are heavily weighted to the second half of the year look ever more challenging to achieve. Fund/corporate/team highlights See above. Outlook As valuations have recovered and covid effects begin to normalise, investors have understandably been far more discerning this results season than in previous quarters. We have generally seen earnings beats met with a more muted reaction – albeit still positive – whilst earnings misses have resulted in some very large share price falls. We wouldn’t be surprised to see this pattern continue into year end, a period which has historically been a very profitable one the Fund on the short side as overly-optimistic forecasts (whether from management or the analyst community) begin to rub against reality. Explore the details A UK long/short equity strategy. Run by experienced managers with a 20 year track record of alpha generation. Read the latest factsheet Related articles MARKET OUTLOOK 03 September 2021 Economic output has recovered, but should we fear a financial reckoning? From the rapid nosedive following lockdowns in March 2020 to springing earnings in the first half of ‘21, we’ve moved through this business cycle at top speed. It’s time to take a look at potential market implications and ask ourselves: Does economic payback await? MARKET OUTLOOK 02 June 2021 Why haven't markets rewarded company results? The first quarter was favourable for equities; companies generally beat earnings expectations, in some cases quite strongly. Recovery is well underway, helped by Covid vaccines and an influx of cash to American pockets courtesy of the Biden administration. So why then are outperforming equities reaping so little reward from their stock prices? MARKET OUTLOOK 01 April 2021 A positive outlook but beware of economic euphoria The global economic outlook is strengthening, and this view has been reinforced by many companies reporting expectation-beating earnings for the last quarter of 2020. But while good business results go some way towards explaining the confidence in equity markets, are they enough to justify inflated prices? Read all Fund Risks Past performance is not a guide to future performance. Do remember that the value of an investment and the income generated from them can fall as well as rise and is not guaranteed, therefore, you may not get back the amount originally invested and potentially risk total loss of capital. A table with five years’ performance is available in the fund factsheets. Part of the Fund will invest in derivatives such as CFDs, futures and options for investment and efficient portfolio management only. There is a risk that losses could be made on derivative positions or that the counterparties could fail to complete on transactions. CFDs are used to obtain short exposures to certain underlying securities. Selling securities short runs the risk of losing an amount greater than the amount invested. The Fund may invest in companies based in emerging markets, which may involve additional risks due to greater political, economic, regulatory risks, among other factors. Ready to invest? Contact us Create a downloadable brochure You can use these buttons to add a page, edit, or print your own brochure Add to brochure Add to brochure Brochure 0 Print Share Contact Us Terms of Use Website Privacy Policy Cookie Policy Modern Slavery Act Transparency Statement Accessibility Legal and Regulatory Sitemap © Sanlam. All rights reserved. Sanlam UK Limited is the provider of the Sanlam website. If you would like to view the regulatory and legal status of each Sanlam company to which this website relates, and the services and products which they provide, please click here. Please agree to proceed. By doing so you agree that you have read and understood the foregoing disclaimer and confirm that you are a professional investor. 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