GTC Quarter 4 December 2022

In-depth market commentary detailing market performance over the quarter If only the last quarter’s performance could be banked into the rest of 2023.  Quarter Four (Q4) of 2022 marked the best-performing quarter of the year for equity markets across the globe.  While 2022 was an extremely challenging year for investment markets, the final quarter saw some relief as the slight shift to a risk-on environment (when investors are prepared to adopt greater risk – selling out of safer haven assets (cash and bonds) in favour of risker assets (equities) – in their pursuit of higher returns) supported the market rebound.  However, significant headwinds persist which could derail this prevailing recovery.  This necessitates continued caution. Over the quarter: The local equity market (+12.22%) outperformed developed (+9.77%) and emerging markets (+9.70%) in both base currency and rand terms.  The risk-on environment over... Read More

Gary Mockler Group Chief Executive Officer         _______________________________________________________________________________________________________ Welcome to 2023.  All of us at GTC trust that you and your families did take a break at the end of the year and that you are ready and anticipating a productive investment year in 2023.  The investment year that was Until right at the end, last year was a long and difficult year (and not only difficult for investments).  Closest to home perhaps (at least here in Gauteng) was the progressive hard evidence of declining service delivery from many municipalities, the most important component of which was of course electricity.  Municipalities will rightfully protest that their lack of delivery in this regard was not of their doing, but rather a direct consequence of Eskom’s utility management.      Avoiding the ‘blame game’ we at GTC rather focus... Read More

Sabir Bacus Senior Benefit Consultant           _______________________________________________________________________________________________________ UniFi’ed clients are happy clients Employers operating a retirement fund for their staff have a statutory duty to provide monthly membership data to the administrators of the fund.  As stipulated by the regulator, this data must comprise specific information which has to be accurate. GTC recently issued a communication on the latest changes to data requirements in terms of the FSCA Conduct Standard 1 of 2022, available here.  This Conduct Standard provides all of the detail needed for satisfying the principles embodied in section 13A of the Pension Funds Act. For a number of years, GTC has provided employers with an electronic process – UniFi – which makes compliance with their statutory duties so much easier.  Some of the advantages of UniFi include: mapping out a benefit structure unique... Read More

Sabir Bacus Senior Benefit Consultant         _______________________________________________________________________________________________________ Dread Disease Benefits A lump sum payout to maintain your standard of living when disaster strikes Insurers, preferring clarity in their naming conventions above politeness, have labeled a range of specific insurance benefits under the descriptive heading of ‘dread diseases’.   Other naming conventions include ‘severe illness’ or ‘critical illness’ benefits.  Whatever its name, a policy in this regard covers a policyholder for a stipulated disease or illness which affects a person’s well-being, with potential and real changes in lifestyle being inevitable.  Conditions covered include various cancers, musculoskeletal diseases, and heart disease.     A group dread disease policy, provided by an employer as a component of their employee benefit programme, provides employees with cover in additional to the conventional death and disability benefits otherwise usually offered.   In this... Read More

Manty Seligmann Director – Asset Management       _______________________________________________________________________________________________________ Is inflation the real threat? Inflation is the sustained increase in the general price of goods and services over a specified period.  The period is typically measured is 12 months though can be viewed over alternate time increments as required. Inflation is usually calculated for a specific region, such as a country or even a demographic group – for instance, pensioners.  It is an important measurement tool as it affects individuals in multiple ways, depending on their financial situation and personal spending or saving habits, as well as their life stage. A country’s central bank has the responsibility of controlling – and usually containing – inflation.  A common practice in the world currently, including South Africa, is to use an ‘inflation targeting’ strategy whereby the central bank sets an upper... Read More

Roy Wright Head – Risk Solutions       _______________________________________________________________________________________________________ Re-examining how risks are underwritten Over the past two years, short-term insurance events have forced insurers and reinsurers to re-examine how risks are underwritten. The increase in natural disasters, as well as politically inspired events (think July 2021 riots in Gauteng and KwaZulu Natal), has been the catalyst for this change in the attitude of insurers. Short-term insurers have become increasingly granular in their view of risk transfer.  The reliance on historical data as well as the improvements in the data available as a result of artificial intelligence (AI) has meant that insurers are now demanding more ‘risk management’ from their clients.  Quite simply, this means that insurers are requiring all of us to play a greater role in the way that risks are mitigated.  This is true for both... Read More

Jenny Williams Senior Servicing Consultant       ______________________________________________________________________________________________ Maturing, withdrawing – or not – and investing in different investment vehicles This is the fourth article in a series on family financial planning and the importance of professional advice in structuring your investments to meet your family’s specific needs and goals.  We look at some of the more commonly utilised investment vehicles on the  maturity and the realisation of the capital proceeds.     Endowment policy An endowment policy is a common and useful vehicle for both contractual and lump-sum investing.  Constructed in terms of the Long-term Insurance Act, an endowment has tax benefits for any investor, which can include both individuals and juristic entities (i.e. companies and trusts) whose tax rate is higher than 30%.  Endowments have a minimum investment period of five years and at the end of... Read More