Financial advice from SA’s top woman asset managers

To mark Women’s Day, approached four of South Africa’s leading women in the asset management industry, asking them about their own investments and what investment lessons they had learnt the hard way that they could pass on to you.

My long-term interests are aligned to those of my clients. I am therefore invested in one of our flagship retirement (regulation 28-compliant) portfolios, the 27four CPI+7% portfolio. The portfolio is 75% invested domestically with 25% invested globally.

At an asset-class level, we have diversified exposure across equities, fixed income, listed property and alternatives. This portfolio can be considered aggressive, because it has about 70% exposure to growth assets such as equities. Domestic market returns were strong up to 2015. However, returns have been subdued since then. Over such periods, we have to remain steadfast in our views and look beyond the noise and short-term fluctuations. Retirement-fund investing is about long-term value creation.

The low-return environment has been characterised by a vicious cycle of a lack of investment from domestic corporates, keeping returnon-investment contained. These corporates have exceptionally healthy balance sheets, with R1.4 trillion in cash. Returns over the long term will improve as the investment environment improves for the deployment of this cash, generating the expected level of return from a high-equity balanced fund.

The global equity environment has already seen the manifestation of this as corporates have begun to invest, generating stellar earnings and supporting strong equity returns.

We can’t underestimate the impact that quantitative easing and low interest rates have had on distorting market forces in the short term and how bond yields were driven lower despite deteriorating local fundamentals.

We should have had more bonds and bond proxies, and the lesson learned is to be tactical in short-term allocations to take advantage of temporary market abnormalities, provided you are being paid to take on the risk.

As invested as we are in our local political and economic situation, we are a small part of the global village, and the search for yield dominated everything else. This provided an opportunity to own high-yielding assets and at the time and we didn’t own enough.