Delivering strong, consistent growth amid global volatility
Co-founder Magnus Heystek brushes off criticism against offshore bias and lets the figures speak for themselves
Today’s truth and facts are often little more than fodder for distortion by the fake news brigade, but for one man only the facts matter. Meet Brenthurst Wealth co-founder and investment strategist Magnus Heystek, who has become synonymous with the call for SA investors to look offshore.
“We’ve had one of our best years ever in terms of returns,” he says, five months after world stock markets tanked due to Covid-19 panic-selling.
In the year to August, Brenthurst’s top 10 funds have delivered average growth of between 18% and 20%.
“We’ve been overweight global equities, underweight local equities and have had no property in our portfolios. And this year our offshore component kicked in aggressively, with some funds delivering between 35% and 40%.”
The charge was led by regular top performer in Brenthurst’s selection of funds, the Mi-plan Global IP Opportunity Fund, which accounts for 15% of all money invested on behalf of its clients.
This fund, managed by
Raging Bull Award winner Tony Bell, has returned 32% this year compared with an average 15% a year for the past few years. The Brenthurst BCI Worldwide Flexible Fund has also delivered strong returns, growing 14% this year.
These figures make it difficult for Heystek’s many detractors to argue against the soundness of having a strong offshore bias. In contrast to his funds’ returns, the JSE all share index has shrunk 1.11% in the year to mid-august.
“I have personally received a lot of criticism, with people saying I’m disloyal and unpatriotic. But my job is to make money for my clients and protect their wealth. If it happens that SA assets do not appeal to us, then it is my duty to call this out and give my reasons.
“Our investment strategies are based on a tremendous amount of research, and as time has passed the macroeconomic picture has worsened. So far we’ve been shown to be correct because it’s based on facts and what is best for our clients.”
This single-minded focus on building portfolios to match its clients’ needs is one of the major advantages Brenthurst holds over larger, institutional investment houses.
Heystek says that this independence allows his team the flexibility to choose from between 60 and 85 global funds and up to 50 domestic funds. “We have the freedom to select and mix and match,” he says.
Rather than fostering a scatter-gun approach because of this wide choice, Brenthurst’s rigorous research process helps identify themes and funds that reflect major trends.
“We’ve been basing our portfolios on global megatrends such as health care, technology, biotechnology, demographics and more recently connectivity, artificial intelligence and cloud computing. None of this is produced in SA and is only available elsewhere in the world.”
Once satisfied that the research points to long-term growth opportunities, Brenthurst then adds instruments to their portfolios that offer the right type of exposure.
This approach has served the firm and its clients well since it was established 16 years ago.
And clients are clearly satisfied with how their money is being managed and the level of personalised service they receive.
This is reflected in Brenthurst again being named Boutique Wealth Manager of the year in the Intellidex Top Wealth Manager award, which is based in part on client feedback and ratings.
The firm has a proud history of being ranked in the top four boutique managers for the past four years, including number one spot in 2017.
Brenthurst’s advisers were also recognised again this year, with financial planners André Basson and Brian Butchart ranked as the second- and third-best relationship managers in SA, respectively. Head of Brenthurst Stellenbosch, Sonia du Plessis, received the inaugural top relationship manager accolade in 2019.
Heystek is justifiably proud of the consistency this performance reflects. “Internally, it shows we’re doing the right thing. And it shows our clients a record of performance,” he says.
Another measure of the trust that clients place in the Brenthurst team is the discipline they showed by not panicking during March’s sell-off. Heystek says one of the first investment lessons he shares with new clients is that they should expect some market crisis in their lifetime.
“The response from clients was remarkably benign. Because we have a very high offshore exposure it protected our local clients. As the markets fell, so did the rand. So, their rand returns were not that badly affected,” Heystek says.
Well-researched investment strategies have helped clients weather the Covid storm