In­vest­ment port­fo­lios pos­i­tive de­spite volatile mar­kets

NFMW port­fo­lios de­liv­ered ex­cel­lent re­turns com­pared to the South African in­vest­ment in­dus­try

Mail & Guardian - - Irfa - Alf James

Look­ing back over the last 12 months, we have seen many sur­prises on a global scale, in­clud­ing Brexit, Don­ald Trump win­ning the US pres­i­den­tial elec­tion and in South Africa, po­lit­i­cal and eco­nomic un­cer­tainty have re­sulted in a chal­leng­ing year for in­vestors.

“The un­cer­tainty, to­gether with the re­cent Cabi­net reshuf­fle, credit down­grades and poor eco­nomic growth rate, cre­ated neg­a­tive sen­ti­ment among for­eign in­vestors and lo­cal busi­nesses alike,” says Sean Sa­mons, prin­ci­pal ex­ec­u­tive of­fi­cer of the Na­tional Fund for Mu­nic­i­pal Work­ers (NFMW).

“Re­cently, South Africa’s economy slipped into a tech­ni­cal re­ces­sion as GDP de­clined 0.7% in the first quar­ter of 2017 (and 0.3% in the last quar­ter of 2016). This poses a se­ri­ous chal­lenge for our pol­i­cy­mak­ers, who are wrestling with high un­em­ploy­ment and bud­getary con­straints.

“Eco­nomic growth in South Africa is des­per­ately needed as the South African con­sumer is un­der se­vere pres­sure.”

Sa­mons says that in June 2017 lo­cal equity mar­kets fell sharply amid the un­cer­tain busi­ness en­vi­ron­ment, with for­eign­ers sell­ing out of lo­cal mar­kets.

The All Share in­dex lost 3.5% in the month with all JSE sec­tors be­ing sim­i­larly af­fected. The rand re­mains ex­tremely volatile and ap­pears to re­act quickly to any po­lit­i­cal news. For ex­am­ple, be­fore the re­lease of the min­ing char­ter and the pub­lic pro­tec­tor’s re­cent com­ments, the rand traded as high as R12.62 be­fore quickly weak­en­ing to R13.08 af­ter the re­ports.

Sa­mons re­ports that given the back­drop of the mar­ket per­for­mance, the var­i­ous NFMW in­vest­ment port­fo­lios de­liv­ered ex­cel­lent re­turns when com­pared to the South African in­vest­ment in­dus­try.

“We are proud to say that on a like-for-like ba­sis (gross of fees) the NFMW Ag­gres­sive Growth port­fo­lio is ranked fourth over a one-year pe­riod, third over a three-year pe­riod, and first over a five-year pe­riod.

“Al­though South Africa is cur­rently in a weak eco­nomic en­vi­ron­ment, sen­ti­ment and pol­icy changes can hap­pen and [things can] im­prove quickly.

“In times like these it is al­ways a good idea to re­main fo­cused on your long-term in­vest­ment strat­egy and not make any de­ci­sions based on the short term,” con­cludes Sa­mons.

Sean Sa­mons. Photo: Sup­plied

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