Market Overview
In-depth market commentary detailing market performance over the quarter The quarter ending September 2022 has been another challenging period for global investment markets as they continued downward. Considerable market volatility and uncertainty have endured amid subdued global trade expectations and global recessionary fears. Increasingly restrictive monetary policies from global central banks – given their concerns around longer lasting inflation – have kept markets in a tailspin. The local equity market (-2.43% in ZAR terms) outperformed developed (-6.19% in USD terms) and emerging markets (-11.57% in USD terms) over the quarter. The local equity market lagged both peers in rand terms as the strong demand for US dollars weakened the rand-dollar exchange rate by 9.6% over the quarter. Nonetheless, the dollar strength benefitted South African companies with predominantly foreign earnings (rand hedge shares) relative to companies with predominantly local earnings. Global... Read More
Asset Management
An in-depth market commentary detailing global and local investment performance over the quarter, with our Asset Management team detailing the importance of the required trust between an investor and their selected asset managers. Market Overview Q3 2022 The importance of trust in active fund management Market update Q&A video
TrueNorth – A component of Altertude
Andre Lindeque Senior Servicing Consultant Altertude, introduced in a previous edition of The Trendline, has it’s cornerstone TrueNorth, GTC’s in-house financial analysis platform. TrueNorth was created – in consultation with independent actuaries – to consolidate an investor’s financial information, providing them with a holistic overview of their financial wellness in real time. Naming convention In the early days of sailing and navigation, explorers learnt the material difference between the different directions which a compass bears, being either magnetic or true north. In addition to the compass direction, finding one’s true north has come to mean a personal self-realisation of one’s values, life purpose and direction. Investors who engage with TrueNorth will receive accurate guidance and are more likely to get to where they are heading, not falling short or getting lost along the way. ... Read More
Asset Management
Clive Eggers Head – Multi Managed Portfolios ________________________________________________________________________________________________ The importance of trust in active fund management In a 2016 article entitled “Even God would get fired as an active investor”, author and portfolio manager Wesley Gray conducted a fascinating thought experiment. He imagined an omniscient, clairvoyant investment manager who built a “perfect” portfolio of stocks that were destined to perform the best over the next five years. Once the five-year period was over, another set of stocks would be selected, again those that would return the best performance over the next five years. To be clear, this is a completely impractical investment approach, relying as it does on perfect, accurate future knowledge. Unsurprisingly, it works exceptionally well. As Gray put it: “’God’ would compound at nearly 29% a year, in theory. In practice, he would run... Read More
Healthcare Consulting
Jillian Larkan Head – Healthcare Consulting Deferred medical scheme contribution increases – September 2022 _______________________________________________________ Premium deferrals are likely to now result in hefty January 2023 increases Medical schemes typically increase their contributions in January each year. The reduction in claims experienced during the COVID-19 pandemic, alongside a desire to maintain affordability for members in a low-inflation environment, saw many schemes defer their 2022 increases, with the biggest open medical scheme – Discovery – originally deferring its increase from January to May 2022, and then again until October. While the January 2023 increases have not yet been announced, Discovery have confirmed a 7.9% increase in October 2022. Various other schemes increased their contributions earlier in the year, although many were also deferred beyond January. The October 2022 increases will almost certainly be followed by scheduled... Read More
Wealth Management
Jenny Williams Senior Servicing Consultant _______________________________________________________________________________________________________ Compulsory investments Part two in our series on de-mystifying some industry jargon and technical language Last quarter we explained how discretionary investments are used in the construction of a financial plan. Industry lingo for investments that are approved by government with tax deductibility specifically for retirement savings, is ‘compulsory’ investments. Why are these compulsory investments? A maximum of 27.5% of taxable income, limited to a maximum investment of R350 000 per annum of taxable income, is allowed into compulsory retirement products. Compulsory investments have a compulsory element to them. To encourage citizens to save for their retirement, and not become a burden on the state in their old age, Government provides tax deductions against taxable income on approved registered retirement products which can be pension funds, provident fund and/or retirement annuities... Read More
