The failure of three US regional banks as well as the collapse of global investment bank Credit Suisse has sparked fears of a looming global banking crisis in the first half of the year. Concerns around a run on bank deposits and a contraction in lending have contributed to relatively widespread pressure on global banking stocks as investors consider the risk of contagion spreading across the sector. South African banks have also come under pressure as investors have generally sold down holdings of perceived risk assets during a turbulent time for capital markets. A systemic banking shock would have especially adverse implications for markets with the experience of the 2008 financial crisis providing a gloomy backdrop for a potential fallout.
0 Comments
In our previous living annuity article, we discussed the impact of drawdowns and volatility in a living annuity portfolio, and how to choose an acceptable drawdown rate. This was done to provide context about choosing the right drawdown, so you do not run out of funds. It’s every retiree’s goal to not run out of money in retirement. Without the comfort of a defined-benefit plan that pays out guaranteed income, many retirees are left to generate cash flows from their investments exposed to the market. It is therefore important to have a portfolio that is geared towards generating healthy growth and returns, offers protection and is cost-effective, to ensure a long-term capital pool to draw an income from. As with the very best sporting teams, every asset in a portfolio plays a role—some assets are more proficient at defence and others press forward to attack—but they need to work together. It is also this cohesion that makes great portfolios. For our investors investing in Morningstar Managed Portfolios, click below to access the latest performance snapshot, market commentary and market performance summary:
Morningstar SA Managed Portfolios Morningstar Global Managed Portfolios (USD) Market Commentary - SA and Global Market Performance Summary - SA and Global The first tranche of the Discovery Capital 200|300+ had an overwhelming response. Due to demand from the market, Discovery will make another tranche available from 15 May 2023 to 19 June 2023 on the Discovery local Endowment. The Discovery Capital 200|300+ July 2023 tranche, similar to its predecessor, will give clients the possibility of 100% growth if the global share basket is flat or positive. It will also offer an additional 100% growth if the global share basket is up by more than 40% over the five years. Growth is before the effect of fees and taxes. With a global portfolio linked to 20 companies in Europe and the United States of America, clients can also get enhanced upside returns with downside protection, hedged against currency movements. In addition, they'll have access to a boost of up to 20% on new lump sum Endowment Plans. How it works The growth clients can get
Clients will get 100% growth if the underlying global share portfolio return is flat or goes up by as little as 1% over a five-year period. If the global share portfolio grows by 40% or more, over the same period, they will get an extra 100% growth. If the global share portfolio goes up by more than 200% over five years, clients will also receive any additional growth above that level. Clients will also receive downside protection Should the portfolio fall by up to 30% during the five-year term, downside protection will kick in. Should the global share portfolio fall by more than 30% from its initial level at any point during the five-year investment period, the downside protection will fall away. The downside protection will provide clients' initial capital back, before the effect of admin fees, advice fees and taxes. The growth, conditional downside protection or any other resulting return is before the effect of advice fees, Discovery admin fees and taxes where applicable. These fees and taxes will affect the final return. Clients can enjoy a boost of up to 20% on client investment In addition to the return of the Discovery Capital 200|300+ Fund, clients can get a boost of up to 20% on their investment if they take out a new Endowment Plan. Clients will receive a portion of the boost after five years, and the rest of the boost after 10 years. For clients with an existing Endowment Plan, the boost will not apply to transfers into the Discovery Capital 200|300+ Fund from non-qualifying funds. This offer is available on our lump sum Endowment Plans from 15 May 2023 to 19 June 2023. To apply for the Discovery Capital 200|300+ (July 2023 tranche), contact Kevin or Sandra in our Investment department, email service@daberistic.com, tel (011)658-1333 Source: Discovery A record amount of R1.6 trillion is currently held in South African bank accounts as retail savings deposits. This is a staggering amount of money which is currently conservatively invested. In many ways, this movement of funds reflects the significant uncertainties faced by investors, both in South Africa and globally. Many investors are sitting in cash with the hope that an attractive entry point into markets may be on the horizon. Unfortunately, as history has taught us, trying to time markets can mostly be regarded as a fool’s errand. Investors are often better off being guided by their willingness and ability to take risk when making investment decisions, rather than the current news flow or the latest geopolitical event. Morningstar Investment Management has informed us of managed portfolio changes. Please click below to view the letter.
During January we saw a healthy rebound in asset prices as inflation numbers globally started to ease, China began reopening and Europe seemed to be more resilient than what the market initially expected. Fast forward to March when the world was faced with a wave of headlines about the biggest US bank failure since the global financial crisis, a takeover of Switzerland’s second-largest bank and the possible contagion to the rest of the markets. Volatility is once again on the rise, with markets suffering a few large down days in the latter part of March. The S&P 500 has faced a daily decline greater than 1% for 16 days year-to-date and the All-Share Index (ALSI) has seen 15 days - both on track to exceed more than the average year. Coupled with this, the Volatility Index ($VIX) rose above 30 on 13 March for the first time since October 2022, signalling increased fear and uncertainty. |
AuthorKevin Yeh Archives
January 2025
Categories
All
|