Morningstar's Electric Observer takes an in-depth look at investment opportunities throughout the value chain as EVs and hybrids will be 2 of every 3 autos sold globally by 2030. In 2022, battery electric vehicles represented nearly 10% of global auto sales, up from a little less than 6% in 2021. Much of the growth occurred in China, which has been a leader in EV sales over the past decade. However, with national EV subsidies in China expiring in 2022 and far lower sales in the U.S. and Europe, the market questions if EV sales can continue to grow without subsides. Source: Morningstar
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With equities no longer the only game in town and free money perhaps something of the past, asset allocation has become so much more complicated and a somewhat fascinating puzzle to solve. With the dislocation present in equity markets from a regional as well as sector perspective – where could money be made in the next decade? Because starting yields from fixed income assets today are much higher, could one argue that bonds have more roles to play today than the traditional uncorrelated nature to equities? How do you construct a portfolio to ensure robustness against a world of glaring problems and how do you ensure a real return for clients given much higher inflation these days? Source: Morningstar
South African investors have a love-hate relationship with listed property, with significant shifts in sentiment and demand evident over the last 10 years. Before 2017, it was quite common for multi-asset funds to have healthy allocations to the S.A. listed opportunity set mostly due to the appeal of property companies offering relatively stable dividends. The S.A. property market demonstrated strong performance between 2013 and 2017, attracting significant investment flows into the sector, as depicted in the chart below. Source: Morningstar
Why fees are not the only determinant to financial success Managing funds and investments requires time, money and expertise. As with any service provider, you are expected to pay a reasonable fee for the use of a company’s products and/or services. The same rule applies in the world of investments and fund management. Warren Buffet’s wise words “Price is what you pay, value is what you get” speak to the actual price that you pay for an asset, stock or investment, versus the intrinsic worth and added value of that investment. The same train of thought can be applied when it comes to the fees paid for investing. Fees are most certainly an important aspect to consider, however, it’s not the only factor that should be considered, but rather be seen as one piece of a larger puzzle. Source: Morningstar
In the fourth episode of Morningstar South Africa’s Adviser 2.0 webinar series, we tackled the topic of succession planning. After spending decades building a financial advisory practice, it’s often difficult to think about handing it over to new owners. But planning for a day when you are no longer an integral part of a business that you built, nurtured, and grew can prepare your practice for a successful future after you have stepped away from the helm. Making succession planning a priority Whether an adviser steps away from their advice practice due to retirement, ill health, by choice, changing career paths, or as we’ve seen in Australia, due to regulatory changes, it is of paramount importance to have a succession plan in place from day one. Source: Morningstar
Storytelling is a powerful way of engaging with people and connecting ideas. One of the most captivating stories in financial markets today is based on the transformative potential of artificial intelligence (AI) and the companies that are best positioned to benefit from the technology. The real challenge for investors, given the current levels of market exuberance, is separating fact from fiction in that story and establishing what a fair price is to pay for uncertainty. Source: Morningstar
China’s latest economic woes is a stark reminder that investing is complex. Here is a quick update on the main issues dominating media coverage:
Source: Morningstar
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