OASIS
CRESCENT
M A N A GEM EN T
20TH FLOOR TRIANGLE HOUSE 22 RIEBEEK STREET
C O M PA N Y
LT D
SOUTH AFRICA w w w. o a s i s c r e s c e n t . c o m
P. O . B O X 1 2 1 7 C A P E T O W N 8 0 0 0
TEL: 0860 100 786 or 27-21-413 7860 FAX: 27-21-418 8363 Email: info@oasiscrescent.com WEBSITE:
YEAR ENDED 31 MARCH 2009 Dear Investor, It gives us great pleasure to present the annual results of Oasis for the year ended 31 March 2009. As the Group continues to fulfill its objective of generating superior returns at lower than market risk through the consistent application of its low volatility investment philosophy, it ensures that our clients real wealth will continue to grow over the long term. Our commitment to our clients is central to our focus and we look forward to providing you with many years of unrivalled service and high-quality investment management. Economies and market comment The world is facing its greatest crisis since the Great Depression and governments and central banks have put in place several rescue packages to counteract the downturn. Governments around the world have responded decisively and substantially to the crisis thus far. This is in stark contrast to the October 1929 equity market crash, when decisive government action occurred only after several years with some policy mistakes such as increased protectionism. In addition, many countries now have social safety nets that protect the poor and newly unemployed. The South African economy is not immune to the global downturn, but our infrastructure spending plans were put in place well ahead of the 2008 downturn, as transport networks and stadiums needed to be ready for their pre-2010 Soccer World Cup trial in June 2009, when South Africa hosts the Confederations Cup. Gross fixed capital formation reached 23% of GDP in 2008 and this investment growth will remain robust following the strong government, parastatal and corporate investment. Infrastructure Spend by type of Project
ZARbn 160 140 120 100 80 60 40 20 0
SA Debt and debt servicing costs to Disposable Income
83 78 73 68 63 58 53 48
forecast
14 13 12 11 10 9 8 7 6 5
World Cup
Eskom
Sep 91
Sep 92
Sep 93
Sep 94
Sep 95
Sep 96
Sep 97
Sep 98
Sep 99
Sep 00
Sep 01
Sep 02
Sep 03
Sep 04
Sep 05
Sep 06
Sep 07
Sep 08
Mining
Telecoms
Transnet
SANRAL
Property
Other Govt
Sasol, Smelters
Gautrain
PPPs
ACSA
Debt to Disposable Income (LHS)
Debt Service to Disposable Income (RHS)
Source: SARB, Treasury, Oasis Research and Macquarie Research.
The South African economy experienced a substantial easing in economic growth during the second half of 2008 with slowing consumer spending and a sharp fall in the export driven mining and manufacturing sectors. The result was that the non-farm economy suffered two successive quarters of contraction on a quarter-on-quarter seasonally adjusted basis. However, growth momentum was sufficiently strong so that the annual average was still robust at 3.1%, despite the sudden withdrawal of foreign capital from the South African equity and bond markets. The weak global demand was reflected in South Africas export performance. The decline in the value of exports in the fourth quarter of 2008 was more than offset by a lower value of imports, mainly due to declining international oil prices. As there was also a narrowing in the deficits on the services, income and current transfer accounts, there was a larger-than-expected reduction in current account deficit, from 7.8% of gross domestic product in the third quarter of 2008 to 5.8% in the final quarter.
DIRECTORS: MOHAMED SHAHEEN EBRAHIM (Chairperson); ADAM ISMAIL EBRAHIM B Soc Sc (Hons) (UCT), CA (SA), CFA (Managing Director); NAZEEM EBRAHIM B Soc Sc (UCT), B Proc (Law) (UCT) (Deputy Chairperson); DR YOUSUF MAHOMED MD* (FACS); ROSHIN-ARA EBRAHIM* BA LLB (UCT). *(Non Executive)
REG. NO. 1997/004764/06
Sep 09
Domestic demand conditions mirrored the weak global demand with gross domestic expenditure contracting by 3.9% in the fourth quarter on a quarter-on-quarter seasonally adjusted annualised basis. Final consumption expenditure by households declined by 2.7%, mainly as a result of a 20% reduction in the consumption of durable goods such as vehicles and furniture. The government has reacted to the slowdown in demand by a counter-cyclical 16.5% increase in government spending to R738.6bn. The February Budget provided more relief for the poor in terms of the social security net and food programmes, such as school feeding. An additional R13.2bn will be spent on social security funds over the next three years, which will now help 13.4 million individuals, which is an increase from 2.4 million in 1996. Individuals also received R13.6bn in tax relief. The public sector including parastatals such as Eskom and Transnet will be spending R787bn on fixed investment over three years, compared with R190.6bn for this last year and R284.5bn in the three prior years. In summary, the current domestic equity market outlook remains positive despite the downside risks that relate to reduced consumer spending and a contraction in global growth. In light of current economic and market conditions we have positioned our portfolios to provide superior performance by investing in companies that are trading at a significant discount to the market, with higher dividend yields and a more sustainable return on equity at a low level of risk. We further believe that our focus on quality and value will provide significant downside protection to your investment through these times. PERFORMANCE Our investment products continue to deliver superior returns to investors across the range, as noted in the attached tables. In recognition of superior performance, Oasis has received numerous awards, which include the recent global awards for providing the Best Global Equity Fund over one-year, the Best Global Equity Fund over 3-years, Best Global Equity Fund over 5-years at the Failaka Awards for the year ending 31 December 2008. The investment philosophy that Oasis has followed since its inception in 1997 was rewarded by a Raging Bull award in February 2009 for the Oasis Crescent Inter national Feeder Fund, which was the best perfor ming inter national fund on a risk-adjusted basis. Oasis also received a Raging Bull award for the Oasis Crescent Management Company, which was placed third in the best management company of the year category. This was the third consecutive year that Oasis was placed in the Top Three, an achievement no other management company in the Top Three managed. The award illustrates the consistency of top performance due to the unique corporate philosophy of Oasis. Our flagship Oasis Crescent Equity Fund continued to provide exceptional returns with annualized returns since inception of 25.2%. This would imply that if you had invested R1,000 in this fund at inception it would now be worth R10,090. For an investor with a lower risk profile the Oasis Balanced Stable Fund of Funds has provided an annualized return of 10.2% since inception. The Oasis General Equity Fund delivered an annualized retur n of 21.1%, whilst the lower risk Oasis Balanced Fund provided a retur n of 17.7% per annum since inception. Our global fund, the Oasis Crescent Global Equity Fund has delivered an annualized return since inception of 3.9% in US$. Current global market weakness provides South African investors with an ideal opportunity to utilize their offshore allowances and benefit from the superior performance of these funds. The conventional Oasis Global Equity Fund remains in the top tier of all global equity funds with annualized returns of 3.1% since inception. Aristotle once said, Pleasure in the job puts perfection in the work, and while our work may reflect remarkable statistics it would be less than impressive if it were not for the continued support of you, our valuable client. We thank you for the contribution you have made towards the growth of this organisation and we will continue to ensure that your assets are well nurtured and that we provide you with the highest standards of investment service it is indeed our greatest pleasure. Should you have any queries regarding your investment please contact our client services department on 0860 100 786. Yours sincerely,
Mohamed Shaheen Ebrahim Chairman Oasis Crescent Management Company Ltd
Adam Ebrahim Chief Executive Officer Oasis Crescent Management Company Ltd
OASIS CRESCENT RANGE - SOUTH AFRICA
Oasis Crescent Equity Fund
Aug to Dec 1998 Oasis Crescent Equity Fund Average General Equity Fund 15.5 -21.9 1999 79.9 51.8 2000 12.5 -3.8 2001 52.6 21.4 2002 18.1 1.8 2003 20.1 22.8 2004 26. 9 38.3 2005 34.6 37.3 2006 41.3 36.8 2007 25.7 17.1 2008 -23.5 -22.9 Mar-09 -6.2 -6.3 Since Inception Cum Ann 1000.9 261.8 25.2 12.0
Total Expense Ratio for the Oasis Crescent Equity Fund 2.04% *
Oasis Crescent International Feeder Fund
Oct to Dec 2001 Oasis Crescent International Feeder Fund Average Foreign Equity General Fund 40.7 43.8 2002 -22.6 -38.2 2003 2.2 0.1 2004 -1.0 -2.2 2005 22.8 23.8 2006 37.4 31.0 2007 4.9 6.2 2008 -15.1 -23.1 Mar-09 -9.8 -8.9 Since Inception Cum Ann 49.2 4.3 5.5 0.5
Total Expense Ratio for the Oasis Crescent International Feeder Fund 2.76% *
Oasis Crescent International Property Equity Feeder Fund
2007 Oasis Crescent International Property Equity Feeder Fund Custom Benchmark** -6.3 -11.8 2008 -35.7 -26.6 Mar-09 -12.4 -8.9 Since Inception Cum Ann -47.2 -41.0 -28.3 -24.1
** The benchmark is the S&P/ Citigroup Global Property Shariaah Index. For Comparative purposes the S&P/ Citigroup Global Property Index performance will be linked from inception (25 Sep 2006) to 31 Aug 2007 to the S&P/ Citigroup Global Property Shariah Index that started in Sep 2007. This custom benchmark will be converted into ZAR for comparison with the Oasis Crescent Global Property Equity Fund.
Total Expense Ratio for the Oasis Crescent International Property Equity Feeder Fund 1.83% *
Crescent Balanced Progressive Fund of Funds
Apr to Dec 2005 Crescent Balanced Progressive Fund of Funds Average Prudential Medium Equity Fund 18.4 21.6 2006 29.8 23.1 2007 15.3 11.6 2008 -18.2 -7.9 Mar-09 -3.5 -3.1 Since Inception Cum Ann 39.8 46.2 8.6 9.7
Total Expense Ratio for the Crescent Balanced Progressive Fund of Funds 2.01% *
Oasis Crescent World Wide Flexible Fund of Funds
Oct to Dec 2007 Oasis Crescent World Wide Flexible Fund of Funds Average Worldwide Asset Allocation Flexible Fund 3.5 -1.2 2008 -16.0 -14.0 Mar-09 -6.5 -4.4 Since Inception Cum Ann -18.6 -18.7 -13.6 -14.1
Total Expense Ratio for the Oasis Crescent World Wide Flexible Fund of Funds 2.66% *
OASIS CRESCENT RANGE - GLOBAL
Oasis Crescent Global Equity Fund
Dec 2000 Oasis Crescent Global Equity Fund Shariah Global Equity Peer Group 0.0 -2.2 2001 -2.0 -20.6 2002 -0.7 -22.2 2003 33.4 24.3 2004 21.7 8.8 2005 11.5 6.9 2006 29.2 15.9 2007 8.2 14.9 2008 -37.6 -39.4 Mar-09 -10.2 -7.1 Since Inception Cum Ann 37.9 -34.6 3.9 -5.0
Total Expense Ratio for the Oasis Crescent Global Equity Fund 2.17% *
Oasis Crescent Global Property Equity Fund
Oct to Dec 2006 Oasis Crescent Global Property Equity Fund Custom benchmark** 4.5 15.1 2007 3.4 -2.0 2008 -55.3 -47.5 Mar-09 -11.7 -8.8 Since Inception Cum Ann -55.4 -46.0 -26.9 -21.2
** The benchmark is the S&P/ Citigroup Global Property Shariaah Index. For Comparative purposes the S&P/ Citigroup Global Property Index performance will be linked from inception (25 Sep 2006) to 31 Aug 2007 to the S&P/ Citigroup Global Property Shariah Index that started in Sep 2007.
Total Expense Ratio for the Oasis Crescent Global Property Equity Fund 1.76% *
Oasis Crescent Global Income Fund
Oct to Dec 2007 Oasis Crescent Global Income Fund Custom benchmark**
Total Expense Ratio for the Oasis Crescent Global Income Fund 0.50% * Collective Investment Schemes in Securities (Unit Trusts) are generally medium to long term investments. The value of participatory interests (units) may go down as well as up and past performance is not necessarily a guide to future performance. Unit Trust prices are calculated on a net asset value basis which is the total value of all assets in the portfolio including any income accrual and less any permissible deductions from the portfolio which may include brokerage, SST, auditors fees, bank charges, custodian fee and trustee fees. A schedule of fees and charges and maximum commissions is available from the management company on request. The maximum initial fee is 5.13% including VAT and the maximum annual management fee is 1.71%, including VAT. Commission and incentives may be paid and if so, would be included in the overall costs. Where exit fees are applicable units are redeemed at the net asset value whereafter the exit fee is deducted and the balance is paid to the investor. Units trusts are traded at ruling prices and forward pricing is used. Unit Trusts can engage in borrowing and scrip lending. Figures quoted are from Micropal for the period ending 31 March 2009 for lump sum investment, using NAV-NAV prices with income distributions reinvested. Fluctuations or movements in exchange rates may cause the value of underlying international investments to go up or down. The fund may borrow up to 10% of the market value of the portfolio to bridge insufficient liquidity. Portfolios are valued at 16h00 daily. All necessary documentation must be received before 10h00. Member of the Association for Savings and Investment SA. Oasis Asset Management, Oasis Crescent Capital and Eden Court Advisory Services CC. are Authorised Financial Service Providers. All information and opinions provided are of a general nature and the document contains no implied or express recommendation, guidance, advice or proposal that the product is appropriate to the investment objectives, financial situation or needs of any particular individual or entity. No warranty as to the accuracy, correctness or completeness of the information and opinions contained herein is provided.* The Total Expense Ratios are for the periods from 1 April 2008 to the 31st of March 2009 and reflect the average Net Asset Value of the portfolio that was incurred as charges, levies and fees related to the management of the portfolio. A higher TER ratio does not necessarily imply poor retun, nor does a low TER imply good return. The current TER cannot be regarded as an indication of future TERs. The ratio does not include trade costs. Full details and basis of award are available from the management company. For global funds a prospectus is available on request from OCMC. Global funds are regulated by the Irish Financial Services Regulatory Authority. A fund of fund unit trust only invests in other unit trusts, which levy their own charges, which could result in a higher fee structure for these portfolios. A feeder fund portfolio is a portfolio that, apart from assets in liquid form, consists solely of units in a single portfolio of a collective investment scheme. Failaka Islamic Fund Awards: Oasis Crescent Global Equity Fund awarded Best Global Equity Fund and Crescent Global Property Equity Fund awarded Best New Fund, for the year 2006.
2008 -4.1 -8.5
Mar-09 -0.4 -0.9
Since Inception Cum -3.8 -8.8
** 50% US 3mnth T-Bill and 5% Dow Jones Citigroup Sukuk Index
0.7 0.5
OASIS RANGE - SOUTH AFRICA
Oasis General Equity Fund
Oct to Dec 2001 Oasis General Equity Fund Average General Equity Fund 21.9 19.5 2002 20.4 1.8 2003 20.8 22.8 2004 39.0 38.3 2005 33.7 37.3 2006 40.0 36.8 2007 23.0 17.1 2008 -20.8 -22.8 Mar-09 -6.3 -6.3 Since Inception Cum Ann 321.2 221.6 21.1 16.6
Total Expense Ratio for the Oasis General Equity Fund 1.72% *
Oasis Balanced Fund
Mar to Dec 2001 Oasis Balanced Fund Average Prudential Medium Equity Fund
Total Expense Ratio for the Oasis Balanced Fund 2.08% *
2002 16.7 2.1
2003 19.8 16.9
2004 27.7 26.4
2005 26.6 25.2
2006 32.1 23.7
2007 15.8 11.8
2008 -13.5 -10.4
Mar-09 -5.1 -3.2
Since Inception Cum Ann 271.0 189.5 17.7 14.0
30.7 20.6
Oasis Property Equity Fund
Oct to Dec 2000 Oasis Property Equity Fund Average Property Equity 6.3 6.8 2001 25.4 16.8 2002 13.8 16.1 2003 32.9 33.2 2004 30.1 34.2 2005 35.4 42.0 2006 36.0 25.7 2007 16.0 21.5 2008 -14.3 -4.5 Mar-09 -4.6 -1.4 Since Inception Cum Ann 357.7 360.3 19.6 19.7
Total Expense Ratio for the Oasis Property Equity Fund 1.69% *
Oasis International Feeder Fund
Dec 2003 Oasis International Feeder Fund Average Foreign Equity General Fund 5.8 7.6 2004 0.7 -2.2 2005 22.8 23.8 2006 37.0 31.0 2007 2.5 6.2 2008 -19.8 -23.1 Mar-09 -11.3 -8.9 Since Inception Cum Ann 30.8 27.0 5.2 4.5
Total Expense Ratio for the Oasis International Feeder Fund 2.77% *
Oasis Balanced Stable Fund of Funds
Apr to Dec 2004 Oasis Balanced Stable Fund of Funds Average Prudential Low Equity Fund 7.3 14.3
2005 2006 2007
2008 -7.8 0.6
Mar-09 -3.1 -1.0
Since Inception Cum Ann 61.0 67.5 10.2 11.0
17.6 16.7
25.5 14.6
13.7 10.1
Total Expense Ratio for the Oasis Balanced Stable Fund of Funds 2.15% *
Oasis Bond Fund
Jun to Dec 2002 Oasis Bond Fund Average Bond Fund
Total Expense Ratio for the Oasis Bond Fund 0.02% *
2003 15.0 17.2
2004 13.6 14.6
2005 9.0 10.5
2006 5.0 5.5
2007 5.9 4.1
2008 13.8 16.2
Mar-09 -0.6 -4.4
Since Inception Cum Ann 97.2 101.0 10.6 10.9
10.0 11.1
Oasis Money Market Fund
Sept to Dec 2001 Oasis Money Market Fund Average Money Market 2.1 2.3 2002 11.1 11.3 2003 11.6 11.8 2004 7.3 7.7 2005 6.8 6.9 2006 7.3 7.3 2007 9.6 9.5 2008 11.7 11.9 Mar-09 2.7 2.8 Since Inception Cum Ann 95.7 97.5 9.4 9.5
Total Expense Ratio for the Oasis Money Market Fund 0.35% *
OASIS RANGE - GLOBAL
Oasis Global Equity Fund
Dec 2000 Oasis Global Equity Fund Global Equity Peer Group 0.1 0.6 2001 0.4 -18.0 2002 -4.0 -20.7 2003 36.5 30.4 2004 24.0 13.9 2005 11.5 11.2 2006 27.8 18.4 2007 5.6 9.8 Since Inception Cum Ann 28.6 -28.4 3.1 -3.9
2008
-41.0 -42.9
Mar-09
-11.4 -10.7
Total Expense Ratio for the Oasis Global Equity Fund 2.19% *