Financials expert Kokkie Kooyman is refusing to drop his aversion to the European market in 2013 as he believes there are too many unknowns still at play in the market.
‘Europe is different. We kept feeling that the risk of investing was too big with unforecastable outcomes. Many things could have, and could still, go wrong. But yes, at a point in time many of the risks were priced in,’ he said.
‘Note, however, that is it always dangerous to judge risks after an event. Fortunately the exposure to India, Thailand and Turkey more than made up for not being invested in Europe.’
The current 15% allocation to Europe in Kooyman’s fund is mainly comprised of exposure to Turkish and Russia banks.
‘Turkey also did exceptionally well, especially TSKB (+71%), but all our Turkish holdings did well, our only criticism is that we sold too early,’ he said in his end of year market commentary.
Meanwhile, the largest allocation by region in the fund is to Asia, which makes up 44% of his geographic exposure. This is comprised of a 13.5% allocation India, which Kooyman said was a major positive contributor to his fund in 2012.
‘India was a stunner. We added selectively during the year and ended with a 13.5% exposure,’ he said. ‘This benefited the fund after the government realised it was in a corner and started pushing through reform initiatives.’
Kooyman had been among fund managers to welcome long-awaited reforms in the Indian economy, which had made Indian banks a more attractive proposition.
He said a resurgent performance in India had helped cover for him missing out on a strong – albeit brief – rally in the European financials sector.
The Sanlam Global Financial fund returned 54.31% over the three years to the end of December 2012. This is while the fund’s Citywire benchmark, the FTSE AW/Financials TR, rose 23.08%.