We wish you and your families all the best for 2017 and hope that this finds you determinedly sticking to those New Year’s resolutions. As we accelerate into the second month of 2017, we really are beginning to wonder what is “fake news” and what is not!? The following, we can assure you, is indeed, real!
The primary themes that determined the fate of investment performance in Rand terms last year were (i) the rebound in resource shares (ii) the strength of the Rand (iii) the rally in bonds post Nenegate (iv) the rally in emerging markets, and (v) the strong performance of “value” as an investment style. A number of fund managers that did underperform relative to the market in 2016 were those with a high offshore exposure and/or no exposure to resource shares and/or a low bond exposure. Those that strongly outperformed were managers with a “value” investment philosophy such as RECM, PSG and Aylett & Company, which typically included exposure to resource companies and/or cyclical companies. Having been through a few tough years in terms of performance, “value” is an investment style that is once again outperforming.