Investment Fund Performance

The performance of the stock markets both locally and worldwide have been under immense pressure over the past 3 – 5 year period.  This is clearly reflected in the returns on our investments and many concerns have been raised across the globe.  Locally, the initial euphoria surrounding the election of President Ramaphosa has died down somewhat as he cautiously attempts to fix a broken South African political /economic situation.  Combine this with the exposure of State Capture,  poor SOE performance (with numerous bailouts), and the  Steinhoff debacle and it is no surprise that the JSE has performed poorly.

Globally, the escalating trade war between the USA and China and the looming Brexit deadline at the end of October have put paid to good market returns worldwide as the US, Asia and whole of Europe are affected.  It is important to realise that South Africa makes up just over 1% of the global market and thus we are heavily impacted by circumstances beyond our control.

The end result of this is that our investments have been affected and returns are suffering.  The attached fund performance comparison (courtesy of Allan Gray) illustrates this clearly and it is important for you to note first of all that no one fund manager has significantly outperformed the other.  Investment management companies locally and globally  work on a defined strategy that is put in place to secure inflation beating performance over the longer periods in excess of 5 years as this is where real returns are to be made. 

Sound investment advice dictates  to stay where you are invested for as long as possible and not to jump around – this has been proven time and time again over many years.  When markets are performing poorly, there is an opportunity to utilize rand cost averaging and buy more units/shares  at a lower  price and reap the rewards once the market rebounds. 

As part of our ongoing service our valued clients, we conduct annual portfolio reviews using a risk analysis tool to ensure their appetite for risk (higher risk = potentially higher returns), is aligned with their personal investment portfolio.  If you have any concerns about your current investment returns or choice of asset allocation and would like a review, get in touch with us and we’ll be glad to assist.

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