Quantitative easing around the world has driven global bond yields to all-time lows while credit spreads have narrowed dramatically. Such is the extent of QE that overnight European bank deposits attract a negative yield, effectively costing the investor money. Prescient Investment Management’s Qualified Foreign Institutional Investor (QFII) license in China creates a unique opportunity to […]
By Sanisha Packirisamy: Economist at Momentum Asset Management Fiscal slippage likely given deterioration in growth ...
By Paolo Senatore, Chief Investment Officer, Ashburton Investments One of the attractive features of listed ...
Taxpayers must prepare to further tighten their belts following the first Medium Term Budget Policy ...
The announcement by National Treasury end of last week to delay the implementation of proposed ...
By Nazmeera Moola, economist and strategist, Investec Asset Management Finance Minister Nhlanhla Nene has his ...
- Q: How did you get involved in financial services? Was it always something you wanted to do?
- A: I always wanted to do this. It’s exciting. My job changes every day as there is always something new happening in global markets. I have always had a passion for big-picture issues driven by macroeconomic events and trends. This interest predisposes me to work in fund management as these are the main drivers of asset allocation and market performance. Big-picture strategies often underpin my approach to an asset class or sector. For example, in recent years many core holdings in the flagship Imara Equity Fund were selected because macroeconomic themes such as consumer market growth, industrialisation and urbanisation highlighted growth potential within sectors such as resources, construction, retail and financial services. My job at Imara Asset Management SA allows me to put my fascination with major trends to work as the investment process here is characterised by a strong top-down or macroeconomic overlay. Thinking long term and considering major strategic drivers as well as fundamental bottom up research have been the main drivers of consistent above average performance for the Imara Met Equity Fund which has achieved a one-year return of 15.7% and annualised three-year returns of 23.4%.
- Q: There's a lot of talk about equity markets being overvalued, at fair-value or under-valued. Is this real investment issue and does it affect individual investment decisions?
- A: Clearly, one’s assessment of value and risk are the overriding issues no matter what the state of the market. That assessment influences all decisions. Markets as a whole are high, but they are not in bubble territory yet. At a time like this, it is important to focus on stock selection. The weaker rand is supporting stellar earnings growth in certain local stocks. The local equity markets is trading on a forward price-earnings ratio of 14.5x, which is spot on its long-term mean, so the JSE is not that over-valued on a 12-month rolling forward basis. The biggest risk is the timing of interest rate hikes in the US as we will also be forced to hike rates locally in order to maintain the foreign funding of our current account deficit. A local rate hike may affect JSE values, but this need not be a major concern for investors with a strategic mind-set who take a three to five year view.
- Q: What makes a good investment and when do you know it is time to exit an investment?
- A: I focus on stocks with excellent management through various business cycles, high returns on invested capital and strong, sustainable free cash flows. Once a stock reaches my fair value or target price, fundamentals are reassessed. I often take profits rather than sell a good company outright. However, if the investment case no longer holds, the stock will be sold. For the average retail investor in unit trusts, the focus falls more on portfolio composition rather than the sale or disposal of one specific holding. The issue here is what makes a good fund investment. In general, the client is looking for a well-diversified portfolio across various economic sectors as an effective mechanism for managing risk. Diversification and time in the market make good risk managers. We do not invest in one single theme at a time. A good portfolio will deliver consistent returns over various investment cycles at a reasonable level of risk. A good portfolio should also deliver a high Sharpe Ratio – an indication of excess return per unit of risk.
- Q: What has been your best – and worst – investment experience?
- A: My best was identifying the emergence of the growing middleclass in emerging markets as a sustained driver of consumer expenditure and GDP growth, particularly in Asia, India and sub-Saharan Africa. My worst experience was being overly optimistic on commodity stocks on the back of growth in China. Commodities are still in oversupply, so this sector might take a while to recover.
Wednesday sees the annual – MTBS – the mini-Budget – Medium Term Budget Speech. While not in receipt of as much attention and media as the February Budget – this year’s mini-Budget is likely to be one of the more closely watched. First of all because it is the Finance Minister’s first budget presentation. What […]
In light of recent comments by Finance Minister Nhlanhla Nene regarding the possible broadening of the tax base for South Africa, the SAIT (South African Institute of Tax Professionals) looks to provide a deeper understanding of what these proposals mean to South Africa. Broadening the tax base is a possible solution, although the room for […]
In recent months, the Master of the High Court (the Master) has often refused to register newly created family trusts if an independent trustee has not been appointed. Although it isn’t a legal requirement, the Master often applies it as such. The Master adopted this practice following the judgement in the well-known Parker case where […]
By Keith McLachlan, fund manager, AlphaWealth A ‘ten bagger’ is colloquial for a share price that rises a thousand percent or, in other words, makes you ten times your money. In some ways the Holy Grail of investments, the key consideration is how do you go about finding a ten bagger? Firstly, you are never […]
The importance of comprehensive public liability cover has again been highlighted following the recent cases of armed robbery at Canal Walk Shopping Centre in Cape Town which resulted in the theft of an estimated R1m worth of Apple products last week as well as R2m worth of diamonds, rings and watches on Saturday – despite […]
With summer on its way, many homeowners will start using their swimming pools again. However, it is essential that consumers make sure they are aware of the legal and insurance implications of owning a swimming pool, as legislation and building regulations place greater responsibility on homeowners. This is according to Lynda Brown, chairperson of the […]
As global markets remain volatile due to a slump in oil prices, and with warnings that low prices might be here to stay, plus the downgrading of global growth forecasts, a leading global analyst from one of the world’s largest independent financial advisory organisations is warning investors to avoid “knee-jerk reactions.” Tom Elliott, International Investment […]
With the summer upon us, the usually expensive holiday season presents countless opportunities to spend. While getting your finances – and debt – into shape during summer can be a tricky task, preparing beforehand will allow you to keep enjoying yourself long after the season is over. According to Wikus Olivier, debt counsellor at DebtSafe, […]
By Shalin Bhagwan, head of solutions at Ashburton Investments If proposals by National Treasury are implemented, all pensioners will find themselves compelled to purchase an annuity upon retirement. In the absence of any guidance, a retiree will have to decide on the credit-worthiness of the financial institution from which he or she will be purchase […]
What to do with your first pay-check to keep you financially healthy for life. When you’ve just graduated or got your first job, investing in your future and eventual retirement are probably the last things on your mind. They shouldn’t be, says financial consultancy Efficient Group, sponsor of the upcoming Investment & Retirement Expo, featuring […]
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- Financial assets 73% of SA household wealth, Credit Suisse Global Wealth Report 1 week ago
- Only 1 billion adults in global middle class - USD10 000 to USD100 000, 400 million have wealth greater than USD100 000 1 week ago
- Financial assets account for 54% of gross wealth. Credit Suisse Global Wealth Report 1 week ago
- Since 2008, inequality has risen - especially in developing economies. 1 week ago
- Wealth increases most noticeable in America and North Europe, Developing economies lag - weaker asset prices and currency pressures. 1 week ago
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Newsletter 16 October: Risk – the low volatility anomaly
Today we share some thoughts on risk. How do we view risk, how have we […]
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