neW dy­naMIC aS­Set Man­aGer IS re­QUIred

Finweek English Edition - - Cover - VIC de KlerK

THE JSE’S ALL-SHARE IN­DEX will never – yes, that’s risky to say, so let’s make it not within the next 20 years – re­cover to the level of 32 000 without the share prices of its heavy­weights at least dou­bling or prefer­ably ris­ing 200% to 300% from cur­rent lev­els. That can only hap­pen if we again have a ru­n­away de­mand for com­modi­ties, as was the case un­til six months ago. That ru­n­away de­mand was in turn the re­sult of the best five-year growth pe­riod ever in the world econ­omy. That was an un­be­liev­ably sweet spot.

New money and new kinds of shares will fare very well on the JSE some­where in the next cou­ple of years. How­ever, the favourite shares – se­lected else­where in this re­port by as­set man­agers – are too small to make up even over the next decade or two the fall of more than R1,5 tril­lion in the to­tal mar­ket value of the JSE caused by the top five alone.

In Ja­pan, even af­ter two decades, the Nikkei hasn’t come any­where near its pre­vi­ous peak. In SA, the same will hap­pen with the all-share in­dex if SA’s re­sources shares don’t start ris­ing sharply again, as they did five years ago.

In brief, that means bal­anced port­fo­lios that tra­di­tion­ally rely on the large cap top shares will not soon, if ever, reach their record val­ues of six months ago. A new dy­namic as­set man­ager – away from the old buy-and-hold ap­proach – is re­quired.

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