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.
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It feels like we barely blinked as January faded into February. Going into the year, it almost felt as though many investors were still shaking off the PTSD of 2022. As the year rolled on, investors were given a glimmer of hope and sat up quickly to watch markets record one of the best Januarys on record. The MSCI World Index was up 7,1% (in USD) and the ALSI 8,9% (in ZAR). Just like that, the year kicked into gear. The below graph illustrates the partial reversal seen in early 2023, with positive outcomes through January. Interestingly, nothing has really changed since December and now. When markets fall fast, as seen in 2022, it catches many people off guard - just like trying to catch a falling knife. Before you know it, your global balanced portfolio is down 15% - 20% in USD. Yes, experiencing such a big loss is difficult, but in some ways, it’s easy too. Not that the loss is easy to bear but not having to make big decisions and knowing that there is not much that can be done at this current stage could aid the possible despair of decision paralysis. Any move, especially to withdraw your investment at such a time, would simply crystallise these losses. 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 Welcome to our 2023 Outlook! This document has been created to highlight the most important issues facing investors, share insights from our current research and help you make better investment decisions as we enter 2023. It has been compiled by our investment leaders, draws on the work of our global team and is informed by our investment principles. As we look back over the year that has passed, it is striking how much the economic, geopolitical and investing environment has changed over the last 12 months. A war in Europe, a cost-of-living crisis and the collapse in the price of (formally admired) technology companies have all grabbed the headlines and reinforce a comment we made this time last year: “The future holds a wide range of possible outcomes and is characterised by unyielding complexity that continually defeats those who seek to make confident forecasts. Fortunately, our role as investors is not to forecast the future, but rather to construct portfolios that empower people to reach their goals whatever the economic and market conditions”. “Investors cannot earn high returns without occasionally bearing great loss. If the investor desires safety, then he or she is doomed to receive low returns.” – William Bernstein. 2022 was a year where most investors had to stomach great losses. Looking back at 2022, mostinvestors are likely to say “good riddance” to the year that was, for a myriad of reasons -
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 We are pleased to share that Allan Gray, one of the largest linked investment service providers (LISPs) in South Africa, has reduced its adminsitration fees. Allan Gray have reduced their local administration fees for third-party funds, effective 1 October 2022. In early 2023, they will combine a client’s local and offshore platform assets for the purposes of calculating their applicable administration fees on each platform, enabling clients to benefit from lower fees. In early 2023, they will introduce a step fee for new clients investing below their lump sum minimum of R50,000. Allan Gray reducing local administration fees for third-party funds Allan Gray's new fees, which are effective 1 October 2022, are outlined below. The administration fee charged for local Allan Gray funds will remain unchanged at 0.20% per annum (excl. VAT). Combining local and offshore platform assets to calculate administration fees (from 2023)
Allan Gray will combine your local and offshore platform assets when calculating your administration fees which will result in more of your assets being subject to the lower fee tiers. Currently, your local administration fees are based on the market value of all local platform assets linked to your investor number and applied to the local administration fee tiers. Your offshore administration fees are calculated separately based on the market value of all offshore platform assets linked to your investor number and applied to the offshore administration fee tiers. The effective date of this change will be communicated ahead of implementation in early 2023. What does this all mean for you as an investor? For clients with assets more than R1 million with Allan Gray, they will enjoy reduced administration fees, so they will keep more of the investment returns. We applaud Allan Gray for reducing costs of investing for clients. For clients with assets less than R1 million with Allan Gray, the 0.5% administration fee stays the same. For new clients with less than R50,000 invested, they will have to pay a step administration fee of 1.0% per annum (excl. VAT), until their investment value has reached R50,000. So Allan Gray is not so cost effective towards smaller investors. This cost is understandable, as there is a base cost of opening and maintaining an investor account. If you have any questions or feedback, email us at service@daberistic.com |
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