If the Financial Services Board’s RDR proposals are legislated, it won’t necessarily be the end of the world: in fact, some advisers will hardly notice the difference, while others that are more proactive will actually thrive. “Advisers that have already started to align their practices to fair client treatment and fair remuneration should not be […]
Is the fact that the oil price is taking a dive among rampant global deflation, ...
There are still good opportunities on the JSE to buy reasonable- to high-quality businesses at ...
South African investors already jittery about global market volatility in the third quarter of this ...
The retirement reforms, which were set to take effect on 1 March 2015, have been ...
There are approximately 3.9 million people that are fortunate enough to belong to a medical ...
- Q: How did you get involved in financial services - was it always something you wanted to do?
- A: I started out in the investment world while still at school, making share investments into "penny stocks (that was all I could afford with my pocket-money at the time!). When I finished school I studied in the Actuarial Science field, but quickly moved on to the more exciting world of Investments. With a mathematical and quants background I gravitated eventually towards fixed income as a specialized field of expertise.
- Q: Interest rates are critical in the investment and fixed income area - it seems that of late interest rate decisions are more political - is this accurate or are interest rate decisions always political?
- A: I disagree strongly with the view that monetary policy has become a more political decision. If that were true, then we would most likely find that our interest rates would be out of kilter with the rest of the world. By the same token, any fiscal or monetary policy decision needs to take the prevailing socio-economic climate into account. That - at times - may be interpreted to mean that it is more political, but the decision itself should always be interpreted in the right context : It is the process itself that is more important, and in that respect, we do not believe the decision-making process has become politically contaminated.
- Q: What has been your best and worst moment in the industry?
- A: The best moment in the industry was when I started Atlantic Asset Management with Murray Anderson, as a specialist and independent fixed income investment house. It was the best moment because it was the culmination of many years of learning and career progression at various other asset managers, and under the tutelage of some giants in the industry. The worst moment was having to deal with the questionable ethics of some colleagues early in my career. It made me all the more determined to be successful without compromising ethical standards.
- Q: How do you rate South African fund managers and our asset management industry?
- A: Overall, I think South African fund managers are a very competent and qualified group of people, and generally have very high standards of performance - this also in a global context. There are of course a few rotten apples though, but generally, they get found out fairly quickly, and regulations have made it all the more difficult to cheat the system." In the fixed income space, I rate my peers highly, and they are all generally very experienced. The industry itself, I do feel however, can be rather bureaucratic - especially amongst the larger firms, and this manifests itself in the tendency for equity funds to eventually become closet index-trackers. What I do not like is the tendency - especially in the hedge fund part of the industry - to overcharge clients by charging both a fixed fee as well as a performance fee. Whilst this is a generally accepted global phenomenon, it is the manner in which it is done - by using a very low hurdle, such as the cash rate, as the level beyond which performance fees accrue. I think that is outrageous, and clients would be right to complain, as it tarnishes the image of the industry. Beyond that, asset managers could and should do more to embrace the challenges inherent in the South African context - especially the socio-economic ones.
Yesterday I had a very interesting chat with Absa Investment’s Armien Tyer. We posed quite a few big questions. Before meeting I was feeling a lot of despair about our narrative on the SA economy. It’s just so depressing – lots of problems, very well known, very well expounded. And lots of solutions too – […]
The consumption appetites of the large economies of the world are the single biggest driver of earnings on the local equity market. The reality is that global demand drives profits, and when the large economies are consuming, profits tend to appreciate. “When the US sneezes the world catches a cold” is a saying we all […]
The huge swing towards index-based investing will see the development of new vehicles including smart beta funds that track bespoke indices, and products that span the middle ground between pure passive and active investing. Herman Steyn, CEO at Prescient Investment Management, a pioneer in indexation, commented: “Over the last decade, index tracker funds, designed to […]
Commentary from Eugene du Plessis, Partner and Head of Tax, Grant Thornton Johannesburg says: “Overall I’m impressed with the way the new Finance Minister Nhlanhla Nene handled this, his first budget presentation. He was well spoken, his points were clear and the delivery was good.” “I applaud the Minister for his attention to focus on […]
Commentary from Kay Walsh, Deloitte Executive Lead in Economics Facing the low-growth reality – additional measures proposed to reign in public debt · While government spending has remained with the limits of the expenditure growth ceiling put in place in 2012/13, economic growth has consistently disappointed relative to National Treasury’s forecasts which has translated into […]
Comment by Dr Kenneth Creamer, economist in the Wits School of Economic and Business Sciences: Central message – a turning point has been reached In the Medium Term Budget Policy Statement Finance Minister Nhlanhla Nene has outlined concrete plans to consolidate South Africa’s pubic finances and restore macroeconomic balances. The proposed adjustments – lower than […]
Saving is very often a matter of not spending With more than half of all economically active South Africans in debt and many of those battling with bad credit records, it may be more effective to try and build a ‘not spending’ rather than a ‘savings’ culture for the country. So says Scott Field, chief […]
1. Quality basic education 2. A long and healthy life for all South Africans 3. All people in South Africa are and feel safe 4. Decent employment through inclusive growth 5. A skilled and capable workforce to support an inclusive growth path 6. An efficient, competitive and responsive economic infrastructure network 7. Vibrant, equitable, sustainable […]
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 outlook Economic conditions, both globally and locally, have deteriorated since National Treasury last published their real GDP growth projections for South Africa of 2.7% in 2014 and 3.2% in 2015. Treasury is likely to downgrade real GDP estimates for this […]
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Newsletter 30 October 2014: Multi asset investing
Diversification offers investors many benefits – some describe it as the only fee lunch around. […]
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