As we screech into the end of 2017 I am sure, as all of us here, you feel exhausted by the bombardment of the local and international news. Be it from the rise (and possible fall?) of Donald Trump, the series of changes in UK leaders and their (mis?)handling of Brexit, Zimbabwe’s bizarre coup that wasn’t (ending 36 years of power by one man), down to South Africa’s own internal shenanigans, the most recent of which being Steinhoff’s fall from grace loosing 80% of its value in 3 days through deceptive reporting (glad to say that clients’ GDA model portfolios were impacted by less than a 1,6% move), the jostling for government power (11 Cabinet reshuffles to date and several rating downgrades) or the weight of the ANC conference that is hopefully to be held in December, this will be a year to remember (or forget).
Locally
We also suffered more than our fair share of natural disaster from droughts in the Western Cape, fires in the Eastern Cape and floods in Natal and parts of Gauteng – oh to be an insurer. We attach a copy of our Model Portfolio managers (2IP), Quarter 4 economic overview which summarises well how we are seeing the political world and in some sense how it is impacting the economic world.
Despite all this, most of our investors have recently enjoyed double-digit returns
For the first time in several years from their growth assets and surprisingly at very low volatility. A welcome early Christmas present as most markets have been relatively benign the last 3 years.
This sudden uptick in markets has highlighted to us once again the benefit of having a well-constructed diverse portfolio that meets the needs and risk profiles of our clients. To this end, we are pleased with our decision as a company to partner with 2IP in creating GDA specific model portfolios which is helping us to better deliver consistent returns to clients. We have created Inflation targeting portfolios (GDA +2%,4%,6% and our discretionary +6%) available on both the Investec and Allan Gray platforms which utilise best of class Asset Managers to help us get the desired asset allocations for our clients.
Please review this document that details 2IP’s investment strategy and some of the reasons we are utilising the model portfolios more and more. If you are not in a model portfolio – don’t panic – you will still be invested in a well thought out, well-priced investment strategy which might not be that easy to move to a model portfolio due to either tax or historic reasons. As always, we are happy to discuss this with you.
On a totally different note
We have received an inordinate number of questions about Bitcoin and cryptocurrency. As this is an unregulated investment product we are not allowed to advise clients on it but our personal thoughts are that although the underlying technology (blockchain) is here to stay the fundamental investment case for cryptocurrency is very hard to quantify. Investec recently wrote an interesting article that talks through the pro’s and con’s of this.
Festive Season wishes!
So as we draw near to the festive season from all of us at GDA we would like to wish you a wonderful Christmas and holiday season. Despite the negative news, we continue to live in a beautiful country with beautiful people. May this quieter time be a peaceful one, a time to turn off that news flow and an opportunity to set some of those goals for 2018. We already have one of ours – get on top of our newsletters
Kind regards,
David, Jonathan and the team