Investment Approach

We believe that one of the keys to success in fund management is focus. At Abax Investments we only manage domestic equity portfolios. We effectively only manage one mandate. All the client portfolios under our administration look almost identical with only subtle differences in mandates - for example, the Abax Hedge Fund holds long as well as short equity positions and the Nedgroup Investments Entrepeneur Fund cannot invest in ALSI-40 shares.

Our investment approach has remained consistent with that which has been applied over the years. In summary this involves:

• a conscientious and determined mental approach;
• a focus on equity mandates with the same targets;
• proprietary research and stock picking rather than passive emulations of competitor portfolios or index benchmarks;
• a belief that earnings growth is the prime driver of share price appreciation;
• investment in emerging growth companies;
• constant adjustment on a relative value basis to reduce risk and enhance performance.

It is a style of management that has been developed and refined by the Abax Investments' team over the years. Key to our success is retaining a flexible position, not being afraid to act when you realise you have made a mistake, and not becoming encumbered by size. It is for the latter reason that in September 2006 we took the decision to close the business to new segregated client mandates. We aim to limit the size of our funds under management to an amount that still allows us to be flexible within the constraints of liquidity on the JSE.