Website: www.daberistic.com Email: invest@daberistic.com Tel: 011 658 1333/1391 Dear Client / Business Associate Compliments of the News Season In our first edition of Investment Focus 2016 we plan ahead for the year on how to handle Investments, the article on Best direction for your investments in 2016 gives a guide on the market share and which markets to target as well as how the past five years’ share performance and current valuation of five well-run rand hedge companies versus five well-run SA Inc companies listed on the JSE. The one thing that is the hottest news in South Africa currently is, the New Tax law in regards to Tax incentives, with National Treasury encouraging us to save more for retirement by significantly increasing the tax incentives, the article More for the future you, less for the tax man is able to clearly explain the new Tax law. Our articles on 2015 Asset Class Total Returns - Listed Property the best performer in a volatile year, Prudential December Fund Fact Sheets help us look back at how markets performed in 2015. We hope that 2016 be a great year with great Financial return for all our Clients ….All the best Best direction for your investments in 2016 It may come as a surprise that, when viewed from a foreigner’s perspective, the JSE All-share index has not increased in US dollar terms since October 2007. In rand terms, the prices of local equities more than doubled over this period. It’s also worth noting that since 2011 our local market has underperformed the world’s developed markets, as measured by the MSCI World Index, by 119% as the rand depreciated from R6.61 to R14.20 per dollar. Given the rand weakness and superior performance by developed market equities, our clients regularly ask us whether they should take more money offshore. At our client roadshow in early 2011, we advised clients to shift their portfolios towards developed market shares given the over-valued rand at the time and relatively attractive valuations of these markets. This was met with some reluctance given that South African shares had outperformed developed markets by more than 500% over the previous decade. The superior economic growth prospects of emerging markets relative to the developed world were also emphasised, while many investors remembered the painful consequences of moving money offshore at the worst possible time after the rand collapsed in 2001. Recent experiences and performances influence investor sentiment, but our investment philosophy takes us back to valuation/price as the primary consideration for investment decisions, while taking account of the prevailing trends and perspectives in the market. In line with what we have advocated since 2011, our asset allocation portfolios have invested the maximum weight in offshore markets that prudential legislation allows. In our equity selection, we have tilted our portfolios towards ‘rand-hedge’ companies that derive the majority of their earnings offshore and away from so-called SA Inc companies whose fortunes depend on the domestic economy. This has benefited portfolio performance, but we continuously reassess our positioning. The table below shows the past five years’ share performance and current valuation of five well-run rand hedge companies versus five well-run SA Inc companies listed on the JSE. Click here to read more Please contact Kevin or Thato, email: invest@daberistic.com, if you have any queries about investments Source: Finance24 More for the future you, less for the tax man The tides are changing in the retirement savings space, with National Treasury encouraging us to save more for retirement by significantly increasing the tax incentives. This is one of several important changes that will go ahead from March this year, now that the President has approved the Taxation Laws Amendment Bill, 2015, which was passed by both Houses of Parliament at the end of last year. Gifts from SARS The wait is over for retirement fund members, who will enjoy increased tax deductions from their contributions to retirement funds. This includes provident funds, for which members were not previously able to claim a deduction. The tax deduction of up to 27.5% of the greater of taxable income or employment income, subject to an annual ceiling of R350 000, will come into effect. Another change is that employer contributions to occupational pension and provident funds will be included in the gross income of employees as a fringe benefit. This means that employees will be able to treat these contributions as their own when calculating their tax deductions. These deductions are subject to the limits mentioned above. You will have to buy an income-providing product…Retirement funds will also be aligned, ironing out some of the differences between the different products. One of the key changes is around ‘annuitisation’ – the process of converting retirement savings into a stream of future income. From 1 March, provident fund members, like retirement annuity and pension fund members, will only be allowed to take one-third of their retirement savings as cash and they will have to use the rest of their nest egg to buy a product that pays them an income during retirement. “Treasury has stressed that vested rights will be protected –i.e. the new rules will not apply to historic savings or to growth on those contributions.” …unless you are about to turn 55…If a provident fund member is 55 or older on 1 March, the new requirement will not apply. Any accumulated retirement savings as at 1 March, as well as new contributions and growth after 1 March, can still be taken as a cash lump sumat retirement. …or you have saved under R247 500 Members with a retirement benefit at retirement less thanor equal to R247 500 will be allowed to withdraw the entireamount without the need to purchase an annuity, as of March.This is an increase on the current value of R75 000. Click here to read more Please contact Kevin or Thato, email: invest@daberistic.com, if you have any queries about retirement funds or Allen Gray offerings Source: Allan Gray 2015 Asset Class Total Returns - Listed Property the best performer in a volatile year SA listed property was the best performer with a total return (income and capital) of 7.99% in ZAR in 2015 Global Listed Property (Developed Markets)
Please contact Kevin or Thato, email: invest@daberistic.com, if you have any queries about any investing Source: I-Net Bridge Prudential December fund fact sheets In December the US Federal Reserve finally raised interest rates for the first time since the 2007 Financial Crisis amid supportive economic data, easing some of the uncertainty hanging over global investors and pushing the US dollar still stronger. Chinese economic data also improved, partly relieving another source of uncertainty. However, global growth prospects, particularly emerging markets, continued to be revised downward, driving commodity prices, EM currencies and EM financial markets weaker (Brent crude lose 17.2% during the month). Assets continued to flow back to the US from riskier destinations. Most equity markets lost ground, as did bonds. Developed market equities produced a total return of -1.7% (MSCI World Free Index) and the MSCI Emerging Markets Index fell 2.2%. Global bonds were largely flat as the Barclays Global Aggregate Bond Index (US$) returned 0.6%, while precious metal prices fell: gold was down 0.34%, platinum -15.9% and palladium -20.5% (all in US dollars). South African bonds, listed property and the rand fell sharply amid the global environment and were all punished by "Nene-gate" on 10 and 11 December. Equities also lost ground as financial shares were hard-hit. The average equity fund returned -2.2% for the month, while the average high equity balanced fund delivered -0.2% (according to Morningstar, using ASISA categories). Multi-asset low-equity funds averaged -0.1%, and multi-asset income funds produced -0.3% on average. SA equities were lower in December in line with other developing markets: the FTSE/JSE All Share Index posted a total return of -1.7%. The All Bond Index suffered a 6.7% loss, and SA listed property returned -6.1%. Inflation-linked bonds were down 1.8%, while cash returned 0.5%. Over the month the rand weakened by 6.9% against the US dollar, by 5.0% against the pound sterling, and by 9.5% against the euro, making offshore assets the best performing for December. Prudential High Yield Bond Fund – The fund has returned -5.0% over 1 year and 1.4% over 3 years. This compares to -3.9% for the All Bond Index over 1 year. Long-dated bond yields have become even more attractive in the wake of December's weakness, rising to over 10%, so that the fund remains overweight duration. Please contact Kevin or Thato, email: invest@daberistic.com, for any queries about Prudential investments Source: Prudential Daberistic contacts details Kindly note the following to ensure you get the correct person to assist you with your insurance and investment queries. Life insurance and investments: Kevin Yeh, Thato Merementsi, Nicole Smith Tel 011 658 1333, email life@daberistic.com Medical aid / gap cover:Namhla Zwane,Sophie SuTel 011 658 1333, email health@daberistic.com Short-term insurance (Personal and Business): Thomas Mooke, Calvin Yen, Tel 011 658 1333, email shortterm@daberistic.com Retirement funds: Kevin Yeh, Tel 011 658 1333, email employeebenefits@daberistic.com Tax, Accountancy and Auditors: Su-Lan Chen or Su-Chin Chen, Tel 011 658 1333, email finance@daberistic.com 24-hour emergency cellphone number: 076 200 5488. Comments are closed.
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