Blogs

By most measures, a number of equity markets, including South Africa are looking stretched in value. As Investors, we have had a relatively smooth ride, with very generous returns since 2009. These above average returns are unlikely to continue for another 6 years, but we cannot know precisely what will happen to change them nor how. One common expectation the asset managers that we engage with regularly, have, is the expectation of volatility over the next 12 months. There are a number of sources of risk in these strange times, the obvious ones being the Greek debacle, Chinese asset bubbles, slow Chinese growth, the expected upward moves in interest rates this year (or will it be next year), to name a few

Clyde Rossouw, an Actuary, and CFA Charter holder, is the portfolio manager responsible for leading the “quality” boutique at Investec Asset Management. Clyde was appointed to run the Investec Opportunity Fund in 2003 after which he was appointed as portfolio manager to the Investec Cautious Managed Fund. In our view, Clyde is best described as asset management’s “safe pair of hands”, and here he provides us with his view on how he invests in today’s low growth environment. In December 2008, as the world was gripped by the onset of the great recession, US 10 year bond yields fell to 2.12%, a low not seen for more than 70 years.

Bateleur Capital, is a boutique investment house that was founded in 2004, and started out as a manager of two successful hedge fund strategies. In 2010, following the success of their hedge fund strategies, the firm launched a long only flexible fund, followed by the launch of an equity fund in 2012. Bateleur is a shining example of a boutique investment house. The team have solid track records, they guard their independence fiercely and are acutely focussed on the investment management aspect of their business. The Bateleur Flexible Prescient Fund, managed by founder and portfolio manager Kevin Williams holds a material exposure to JSE listed companies with offshore property portfolios that have a predominant exposure to Europe. The following extract from their 2015 Q3 report provides a fascinating insight into their views on this investment theme.

In February 2013 when he tabled the 2013/14 Budget, the Minister of Finance stated that the government will initiate a tax review “to assess our tax policy framework and its role in supporting the objectives of inclusive growth, employment, development and fiscal sustainability”. The Committee established to do the review is known as The Davis Tax Committee (DTC) and has been in existence for two years.

Professor Brian Kantor has had a long academic career at the University of Cape Town where he served as a Lecturer and Professor of Economics and as Dean of the Faculty of Commerce. Brian is currently the Chief Strategist and Economist at Investec Wealth and Investment (IW&I) in South Africa. WellsFaber partner with IW&I’s team of direct equity portfolio managers as one of the providers of managed equity portfolios both locally and offshore for our clients. The following article, recently penned by Prof Kantor, provides an interesting view on the connection between the Rand, Interest Rates and the resulting challenges faced by the MPC .