PODCAST | Small- to mid-caps doing well in a tough economy, says Sanlam

This edition of the Business Day Spotlight focuses on the growth and outperformance of smaller JSE-listed stocks outside the Top 40. 

Our host Mudiwa Gavaza is joined by Vanessa van Vuuren, portfolio manager for the SIM Small-Cap Fund at Sanlam Investments. 

Even as financial markets have seen much volatility since the Covid-19 pandemic, Sanlam says small- to mid-cap companies have done well in 2021 and 2022. 

Van Vuuren outlines the investment thesis for her fund and how some of these often-overlooked companies have performed well against a backdrop of global macroeconomic growth concerns and a rising interest rate cycle. 

The top five stocks in the fund are: Famous Brands, Omnia, Sun International, Reunert and Reinet Investments.

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She says the reality is the outlook for SA’s economy — to which many of these companies’ fortunes are tied — is not good at the moment, worsened by elevated levels of load-shedding since November last year.

Even so, some have managed to buck the trend. 

“For example, both Famous Brands and Sun International continue to benefit from a recovering base in their own respective cycles (hospitality and leisure) and still offer attractive upside to intrinsic value.”

Topics of discussion include: Sanlam’s small cap investment thesis; the outlook for the SA economy; companies that have managed to do well in recent years; and rules of portfolio management. 

Business Day Spotlight is a TimesLIVE Production.