MONTHLY INVESTMENT INSIGHTS - JUNE 2018 - PSG
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MONTHLY INVESTMENT INSIGHTS JUNE 2018
Contents 1. The monthly interview – Economist, Tim Harford 3 2. Tactical asset allocation preferences 7 3. Market commentary 8 4. Local unit trust solutions 9 5. Offshore unit trust solutions 15 6. PSG Wealth equity portfolios 22 7. Other publications 27 2 | PAGE PSG Wealth | Monthly Insights - June 2018
The monthly interview
This month we bring you some more insights from the economist, Tim Harford. At the PSG annual conference,
Harford highlighted the common pitfalls of forecasting and shared what sets super forecasters apart: self-
measurement, flexible thinking and the willingness to change your mind/opinion. We interviewed him after
the conference.
What, in your opinion, is the Irving Fisher was basically making heavily leveraged bets
mind shift that advisers would which, always makes you very vulnerable to a downturn. So,
need to make to get to become the first thing to ask yourself is does the forecast have to be
better forecasters? right, because if the forecast has to be right, then we are
probably already in a difficult situation. The second thing is
I remember working for a big oil how to make a better forecast. I referred in my presentation to
company many years ago and research by Philip Tetlock, who has studied tens of thousands
being asked to make some GDP of forecasters over many decades, measuring everything
forecast. And I remember saying about the people who forecast well and the people who
Economist, Tim Harford
“Well I don’t really know, here is don’t.
what the international consensus
says,” and the guy said “Well, what do you mean you How can advisers improve their forecasting skills?
don’t know? I need to know the forecasts!” He said it
It is important to note that you can get better at forecasting,
is like he was about to fire a missile and was asking me
you can improve yourself. An easy way to improve is to keep
to give him the coordinates, and he couldn’t make his
track of what you were forecasting before, be specific, keep
business plan work until I gave him the coordinates.
track and to go back and check. Most people don’t do this
and if they do it informally, they systematically mis-remember
I remember thinking to myself: OK, if I tell you I cannot
what they had forecast.
give you the coordinates you probably should not fire the
missile, or maybe you should be launching your business
For example, all these people who now think they forecast
plan in a different way that does not require the perfect
2008’s financial crisis and recession. There are a lot of people
coordinates to start with. So, I guess the first question to
who think they did. However, most of them didn’t, and
ask is, what is our strategy in whatever we are doing, and
most of them will struggle to point to something in writing
is our strategy dependent on the forecast being correct.
beforehand.
Because, if the strategy is dependent on the forecast being
So, keep score because you can get better at forecasting - that
correct then, it is probably not a very good strategy. There
is the first thing. The second thing is, think in a probabilistic
are certain things in this world that we can forecast very
way (involving chance variation) when you are trying to make
well, but the big picture economic geopolitical stuff is not
a forecast. Ask yourself a question, for example what is the
among them.
chance that the economy will go into recession, this year?
The first thing you can do is say well, how often does this
So, the first thing to say is “OK, I need to have an investment
economy go into recession? How often is that true generally.
portfolio, an investment strategy that is robust, if the
forecast is not very good.” I talked about the investment
I don’t know the statistics for South Africa, but in my own
strategy of John Maynard Keynes and Irving Fisher in my
country, the UK goes into recession roughly about every
presentation, and neither of their strategies were robust to
nine years. So, if you do nothing else, you could say well
forecast failure.
the chance of the UK going into recession this year is about
one in nine. And that is not an amazing forecast, but already
that’s better than many forecasts will be.
Tell us a bit more about the strategies of Keynes
and Fisher?
The same thing applies to political transitions. How often
John Maynard Keynes’s entire strategy was based on “I’m do presidents’ get replaced? How often do incumbents
going to move between sectors, pro-cyclical or counter- lose elections? How often are there coups? How often do
cyclical, depending on whether I can forecast the recessions presidents’ die in office, and so on. You could look at all this
or the booms.” If you can’t forecast recessions or booms (and sort of stuff, you can get data on all of this, if you want to
as it turns out he could not forecast recessions or booms) and that really helps.
then, that strategy is completely useless.
The opinions expressed in this interview are the opinions of the interviewee and not necessarily those of PSG and do not constitute advice. Although the utmost care has
been taken in the research and preparation of this document, no responsibility can be taken for actions taken on information in this interview.
3 | PAGE PSG Wealth | Monthly Insights - June 2018
The monthly interview
What is the most important thing to remember Because you are gaining something when the numbers and
when forecasting? your instincts tell you something different, (you should know)
The most important thing, is open-mindedness. So, Tetlock is there is something there to explore. And I don’t think there’s
a psychologist and he measures what he calls, actively open- a hard and fast rule that says, ‘and you should always go with
minded thinking - a constant questioning of your previous the number’ or ‘you should always go with your gut.’
beliefs’ meaning. You are constantly asking yourself, what
am I missing? And you are happy to change your own mind. Jeff Bezos made a very interesting comment, that I do not
You see it as a sign of progress, ‘I’m getting smarter,’ rather completely agree with, but I thought it was interesting. He
than a sign of failure or weakness. said when the numbers and the anecdotes are telling you
something different, the anecdotes are usually right, and it
Actively open-minded thinkers like to get into arguments and is usually because the numbers aren’t measuring the right
disagreements with other people, because they think that’s a thing, that’s interesting.
source of insight. If I disagree with someone, then maybe he
is wrong, maybe I’m wrong. So, let’s have the argument and I So, I think that when (these views) clash you learn something
might get smarter. Most of us don’t think like that. (Fostering - you have to start asking yourself why do they clash? Is it
this quality makes) you a better forecaster, but it also makes because I, personally am getting a very (biased) view of the
you more robust to forecast failure. So, if you did get it wrong, situation, my instincts are leading me astray or I’m talking
a willingness to recognize that quickly, can overcome some of to the wrong people, or is it that the numbers are omitting
the facts that you got wrong. something really important? Are they fraudulent or do they
just not measure what matters? There is no straight forward
In your talk, you mentioned how there is this bias answer, but the existence of tension, I think is informative.
towards numbers, like in the case of Fisher. Whereas
Keynes had the perspective on animal spirits and If you have to give one piece of advice to our
the role of emotions in investing. How (do) we advisers on how they guide clients into better
incorporate that into our thinking? decision making, what would you say?
Some people love emotions. They love gut feeling and they I think (when) talking to the client, you always have to have
hate numbers. So, I have been thinking about this recently. a conversation about the alternative scenarios. Where we
I sometimes call it statistics fast and slow, after Daniel are making decisions together, we all have to ask ourselves,
Kahneman’s book, Thinking fast and slow. Here thinking ‘what if I am wrong? When you are (wrong), having
slow is rational, cognitively taxing, really thinking through that conversation with a client. I would have the honest
the statistical or the logical structure of a situation. Whereas conversation.
thinking fast is just, certain things are automatic, certain
processes are intuitive, not necessarily right, but intuitive and I think that is hard to do, because it suggests a certain
easy. pliability - that actually my own dealings with professionals,
the ones that explore different possibilities and raise the
I think statistics fast and statistics slow, (is) clashed between prospects, they might be wrong. I find that, to actually have a
this kind of logical, numerical view of the world and your conversation about that, personally, is very appealing. “What
anecdotal impressions or your gut feel. That is a healthy if I’m wrong?” So ensure you explore various scenarios that
thing and that is a source of further reflection and open- might impact your client’s wealth and share it with them.
mindedness.
The opinions expressed in this interview are the opinions of the interviewee and not necessarily those of PSG and do not constitute advice. Although the utmost care has
been taken in the research and preparation of this document, no responsibility can be taken for actions taken on information in this interview.
4 | PAGE PSG Wealth | Monthly Insights - June 2018
Tactical asset allocation preferences
EMERGING EQUITY DEVELOPED
South Africa ITY Global
U PRO
EQ PER
Cyclical Defensive TY
sive Retail
Defen
Challenging economic conditions persists,
al
but valuations do not seem to price in all clic
Cy
the risks. Liquidity in the event of a market l Re Global growth sets a healthy backdrop,
tia sid
shock remains a concern. n en but valuations seem to be pricing in a lot
TY
s ide tia
Re of good news.
ER
l
OP
Go
BO
PR
ve
rn
ND
Disruptive technologies are causing
m
en
S
headwinds in the retail property space.
t
Particularly in the US, stronger growth
Here we are very selective in our approach favours credit over government bonds,
Cre
l
tai
and cautious with our allocations.
dit
Re
although there exists a caveat for high
quality, investment grade exposure, and
very selective buying.
it
USD
Our current view on government bonds is Cred
BONDS
neutral, while we assess pockets of risk and
CURRENCY
opportunity. If the rand strengthens beyond
t
Governmen
our base view we expect bonds are likely to
GBP
rally and yields could decline. To us it seems The USD seems too strong, while
as if the bond market is already pricing in the GBP and EUR seems too weak in
MPC rate cuts expected on the horizon. relation to the USD.
CASH
ZAR
EUR
Strategic asset allocation
Tactical asset allocation
The market is expecting that the MPC will Changes this month
cut rates, but we feel the MPC will lean
towards a cautious approach.
Overweight: Neutral: Underweight:
Tactical recommendation to Tactical recommendation to Tactical recommendation to
hold more of the asset class hold the asset class in line hold less of the asset class
than specified in the with its weight in the than specified in the
strategic asset allocation strategic asset allocation strategic asset allocation
Bottom line
• Our assessment shows that domestic equity is now • Domestic listed property is undervalued by 2.50% • Similarly, domestic bonds are, in general, also overvalued • Global equity is slightly overvalued by 17.50% on a
roughly 22.70% overvalued relative to its historic relative to its historic earnings yield. In addition, we by more than 23.60% and will struggle if domestic historic earnings basis, although the shift towards
yield. Some pockets of the market are expensive and remain of the opinion that the interest rate cycle will interest rates normalize. There are always exceptions, fiscal stimulus could support the asset class. In the US,
investors should expect continued volatility at current impact the strength and sentiment of the domestic but generally speaking bond yields seem stretched. further aims at deregulation will support corporate
levels. Skilled stock pickers should be able to find value economy, and the affordability of the property sector earnings, although the timing of fiscal support policies
in selected shares specifically. This will present headwinds for capital • Domestic cash is most likely generating a negative real and potential deregulation is uncertain at this stage.
growth in the property sector. We expect property return for investors, after fees and taxes. We remain of
yields, which are calculated as a percentage of capital, the view that although cash can play a strategic role in
to normalize on the back of downward pressure on a portfolio, there is a material trade-off over the long
capital values. term.
5 | PAGE PSG Wealth | Monthly Insights - June 2018
Market commentary
In their monthly market review, Schroders notes that global equities gained overall in May, although regional
performance was mixed. Economic data remained broadly supportive, but politics in Europe and trade worries
weighed on some riskier assets. US equities advanced with economic data resilient enough to allow investors
to shrug off trade sanction uncertainties. Eurozone equities saw negative returns as political uncertainty in Italy
dominated market moves. Financials, especially banks, saw sharp declines. Emerging markets equities lost value,
with US dollar strength a headwind. Government bond yields fell (i.e. prices rose), reflecting increased risk aversion
over the month.
JSE All Share Index - February 2018
59 500
59 000
-3.57%
58 500
58 000
57 500
57 000
56 500
Daily JSE All share index closing value
56 000
55 500
55 000
54 500
54 000
2.01% 1.26% 1.86% 1.00%
53 500
53 000 The JSE slipped in broad- The JSE closed firmer on a The JSE slipped in broad-based The JSE closed firmer in its
based losses, with rand- sterling performance from losses, as a series of events prompted best one-day performance
52 500 sensitive stocks faring Naspers, while platinum investors to shy away from risk in two weeks, with all the
52 000 worst, as a 4.45% drop and gold stocks dropped on assets. The rand was weaker despite major indices recording
by Naspers put the most weaker metal prices and a the release of upbeat inflation data gains.
51 500
pressure on the local stronger rand. earlier, putting pressure on banks,
51 000 bourse. financials and retail stocks. The
resurfacing of fears over global trade
50 500
also put pressure on commodity
50 000 prices, ensuring local miners were
49 500 lower on the day.
49 000
April 30 May 04 May 08 May 12 May 16 May 20 May 24 May 28
Source: Bloomberg
Domestic key moves
The benchmark repo rate was left unchanged at The US unemployment rate fell to 3.80% in May
6.50% 3.80% 2018 from 3.90% in the previous month, and
6.50% by the South African Reserve Bank
(SARB) on 24 May 2018 after trimming it by 25 bps in the below market expectations of 3.90%. It was the lowest
previous meeting and matching market expectations. rate since April 2000, as the number of unemployed
decreased by 281 000 to 6.07 million and employment
South Africa’s jobless rate stayed steady at rose by 293 000 to 155.47 million.
26.70%
26.70% in the first quarter of the year. The
number of unemployed remained unchanged from the Unemployment rate in the US
previous period. The number of unemployed increased 4.6
by 100 000 to 5.98 million and the number of employed
rose by 207 0000 to 16.38 million. 4.4
4.4
4.3 4.3
4.2
Global key moves
4.2
4.1 4.1 4.1 4.1 4.1 4.1
4
US
3.9
3.8
3.8
0.60%
Personal spending in the US increased 0.60% in
April 2018 after an upwardly revised 0.50% gain Jul 2017 Oct 2017 Jan 2018 Apr 2018
3.6
in March and beating market expectations of a smaller
0.40% gain. It is the biggest increase in personal spending Source: Trading Economics
in five months, mainly boosted by a rebound in
consumption of nondurable goods.
6 | PAGE PSG Wealth | Monthly Insights - June 2018
Market commentary
EU Japan
1.90%
The annual inflation rate in the Eurozone is Japan’s trade surplus widened 30.90% to JPY
expected to rise to 1.90% in May 2018 from 30.90%
626 billion in April 2018 from JPY 478 billion
1.20%. It is the highest rate since April 2017, mainly in the same month a year earlier and beating market
boosted by rising oil prices. expectations of a JPY 405.6 billion surplus.
The unemployment rate in the Eurozone The unemployment rate stood at 2.50% in April
3.80% decreased slightly to 8.50% in April 2018, 2.50%
2018, the same as in the prrvious two months
following an upwardly revised 8.60% in March. Markets and matching market estimates. The jobs-to-applicants
expected a number of 8.40%. It remains the lowest ratio was also unchanged from the previous month at
jobless rate since December 2008, well below 9.20% a 1.59%, while markets expected 1.60%.
year earlier.
The unemployment rate in Japan
China 3.2
3.1
12.90%
Chinese exports grew by 12.90% to $200.49 3
billion, recovering from a 2.70% decline in the 2.8 2.8 2.8 2.8 2.8
preceding month, but above forecasts of a 6.30% gain. 2.7 2.7
2.8
Outbound shipments of unwrought aluminium and
2.6
aluminium products, including alloy and semi-finished 2.5 2.5 2.5
aluminium products, came in at 451 000 tonnes in April. 2.4
2.4
Interest rates in China fell to 1.80% in April 2.2
1.80% 2018, from 2.01% in the previous month, Jul 2017 Oct 2017 Jan 2018 Apr 2018
missing market consensus of 1.90%. It was the lowest Source: Trading Economics
rate since January, mainly due to a sharp slowdown in
food inflation.
7 | PAGE PSG Wealth | Monthly Insights - June 2018
PSG Wealth Fund of Funds Solutions
Local funds
Performance table
Fund 6 Month 1 Year 2 Year 3 Year 4 Year 5 Year
PSG Wealth Enhanced Interest D 3.91% 8.02% 8.13% 7.87% 7.44% 7.11%
PSG Wealth Income FoF D 4.18% 7.88% 8.36% 8.28% 8.17% 7.70%
PSG Wealth Preserver FoF D 0.68% 5.54% 4.84% 6.29% 7.41% 7.76%
PSG Wealth Moderate FoF D -1.96% 4.76% 3.73% 5.22% 6.94% 8.57%
PSG Wealth Creator FoF D -4.82% 4.99% 4.43% 3.27% 5.13% 8.71%
Source: PSG Wealth research team
Local fund performance
10.00%
8.00%
6.00%
4.00%
2.00%
0.00%
-2.00%
6 Month 1 Year 2 Year 3 Year 5 Year
-4.00%
-6.00%
-8.00%
PSG Wealth Enhanced Interest D PSG Wealth Income FoF D PSG Wealth Preserver FoF D PSG Wealth Moderate FoF D PSG Wealth Creator FoF D
Source: PSG Wealth research team data as at 31 May 2018 *Dots represent the relevant benchmark
Disclaimer: All performance is reported in ZAR unless specified otherwise
8 | PAGE PSG Wealth | Monthly Insights - June 2018
PSG Wealth Domestic Solutions
PSG Wealth Local Fund of Funds bubble chart
Source: PSG Wealth research team
HOW TO READ THE BUBBLE CHARTS
shows TER which is an indication of cost. The
Vertical axis shows the return of each fund Size of the bubble TERs for the fund benchmarks are assumed to
be 1.14% including VAT.
Horizontal axis shows the downside deviation which is a measure of Grey bubbles indicate relevant fund benchmarks
downside risk that focuses on returns that fall below a
minimum threshold or minimum acceptable return (MAR) Gold bubbles represent PSG Wealth EB solutions
Disclaimer: All performance is reported in ZAR unless specified otherwise
9 | PAGE PSG Wealth | Monthly Insights - June 2018
PSG Wealth Domestic Solutions
PSG Wealth Enhanced Interest Fund PSG Wealth Income FoF
• The PSG Wealth Enhanced Interest Fund delivered • This fund delivered a return of 0.29% for May 2018,
a return of 0.69% for May 2018, compared to the compared to the 0.64% of its benchmark, the Stefi
0.60% of its benchmark, the South Africa IB Money 12 Months NCD.
Market Sector Average. • The PSG Wealth Income FoF has an investment
• This fund has an investment horizon of one year, horizon of two years, and it has outperformed its
and the fund has outperformed its benchmark benchmark comfortably with 8.36% against 8.20%
comfortably with 8.02% against 7.56% over the over the two-year period, and is ranked 25th out of
one-year period. 65 funds over this period.
• The fund has also outperformed its benchmark over • This fund also delivered first or second quartile
all measurement periods of one month and longer. performances for all measurement periods over six
months.
Asset allocation
Asset allocation
Domestic bonds, 43.07
Domestic cash and money market, 41.6
Domestic property, 4.67
Domestic cash and money market, 100 Foreign other, 2.54
Foreign bonds, 1.99
Domestic equity, 1.78
Domestic other, 1.34
Foreign property, 1.11
Foreign equity, 1.05
Foreign cash and money market, 0.84
Source: PSG Wealth research team
Source: PSG Wealth research team
Risk and expectations: We are confident the fund
will continue to deliver returns in access of money
market rates to reduce the negative effects of high
inflation on cash. Risk and expectations: We expected that higher
Radar: No funds on the radar screen. inflation and rising interest rates could be a drag
Changes: There are no changes to the underlying on performance over the short-term, but current
funds. indications are that the underlying portfolio managers
are able to take advantage of the higher yields on
short-term instruments to deliver attractive returns
close to the top of the inflation cycle. We are confident
that the underlying portfolio managers will continue
to deliver attractive above average returns until well
after the interest rate cycle has peaked.
Radar: No funds on the radar screen.
Changes: No changes to underlying funds.
10 | PAGE PSG Wealth | Monthly Insights - June 2018PSG Wealth Domestic Solutions
PSG Wealth Preserver FoF PSG Wealth Moderate FoF
• The PSG Wealth Preserver FoF delivered a negative • The PSG Wealth Moderate FoF delivered a negative
return of 0.68% for May 2018, compared to the return of 1.75% for May 2018, compared to the
1.00% of its performance target of CPI plus three negative return of 1.97% of its benchmark, the
percent. South African MA High Equity Sector Average.
• This FoF has an investment horizon of three years, • This FoF has an investment horizon of five years, and
and it has underperformed CPI plus three percent has outperformed its benchmark comfortably with
with 6.29% against 8.53% over this period. 8.57% against 6.82% over the five-year period. It
• The fund also outperformed the 5.09% of the South is also ranked 12th out of 87 funds over this period.
African MA Low Equity Sector Average comfortably • It also delivered a second quartile performance for
over the three-year period, and is ranked 16th out of 1-month and 3-month periods and first quartile
107 funds over this period. performance over all other measurement periods.
• This fund also delivered first or second quartile
performances over all measurement periods over Asset allocation
one month.
Domestic equity, 40.65
Asset allocation Foreign equity, 22.5
Domestic bonds, 16.97
Domestic bonds, 32.91 Domestic cash and money market, 10.91
Domestic cash and money market, 20.69 Domestic property, 6.35
Domestic equity, 19.27 Foreign property, 1.72
Foreign equity, 17.29 Foreign cash and money market, 0.84
Domestic property, 5.25 Foreign bonds, 0.05
Foreign property, 2.18 Domestic other, 0.01
Foreign cash and money market, 1.8
Foreign bonds, 0.44
Domestic other, 0.19
Source: PSG Wealth research team
Foreign other, -0.02
Source: PSG Wealth research team Risk and expectations: The PSG Wealth Moderate
Risk and expectations: The PSG Wealth Preserver FoF may hold up to a total of 75% in domestic
FoF can hold up to a total of 40% in domestic equities equities and offshore equities, and could deliver
and offshore equities, and may deliver negative negative short-term performances in sharp equity
short-term performances in sharp equity corrections corrections or equity bear markets. We are, however,
or equity bear markets. We are, however, confident confident that the fund will always deliver positive
that the fund will always deliver positive returns returns over the preferred investment period of
over the preferred investment period of three years five years and longer, and that it will continue to
and longer, and that it will protect the capital of deliver above average long-term returns with below
clients during severe negative market corrections. average risk overall market cycles.
Radar: The Sim Inflation Plus Fund, The Investec Radar: The Sim Balanced Fund has been added to
Cautious Managed Fund, The Coronation Balanced the radar screen.
Defensive Fund and The Prudential Inflation Plus Changes: No changes to underlying funds.
Funds have been added to the radar screen.
Changes: No changes to underlying funds.
11 | PAGE PSG Wealth | Monthly Insights - June 2018PSG Wealth Domestic Solutions
PSG Wealth Creator FoF
• The PSG Wealth Creator FoF delivered a negative
return of 2.70% for May 2018, compared to the Risk and expectations: Although the outlook for
negative return of 3.72% of its benchmark, the equities are still uncertain, we are confident that the
South African EQ General Sector Average + relative performance of the underlying managers in
• The FoF has an investment horizon of five years and the fund will continue to improve in the near future.
longer, and has outperformed its benchmark with The managers are all active managers that have
8.71% against the 6.65% over the five-year period. demonstrated the ability to add alpha through careful
It is also ranked 22nd out of 98 funds over this stock selection, particularly during turbulent equity
period. markets. This fund will always maintain an equity
• It also delivered first or second quartile performances exposure of close to 100% in domestic and offshore
for all measurement periods. equities. It will deliver negative performances in
sharp equity corrections or equity bear markets. We
are, however, confident that the fund will always
Asset allocation deliver positive returns over the preferred investment
period of five years and longer. It will continue to
deliver above average long-term returns with below
Domestic equity, 79.35
average risk overall market cycles.
Foreign equity, 15.78
Radar: No funds on the radar screen.
Domestic property, 2.48 Changes: No changes to underlying funds.
Domestic cash and money market, 1.91
Foreign property, 0.27
Foreign cash and money market, 0.21
Source: PSG Wealth research team
12 | PAGE PSG Wealth | Monthly Insights - June 2018PSG Wealth Offshore Solutions
Offshore funds
Performance table
Reported in USD
Fund 6 Month 1 Year 2 Year 3 Year 4 Year 5 Year
PSG Wealth Global Preserver FoF D USD -0.22% 1.61% 5.05% 3.30% 3.02% 3.48%
PSG Wealth Global Moderate FoF D USD -0.22% 5.01% 6.61% 1.89% 1.90% 3.64%
PSG Wealth Global Flexible FoF D USD 1.49% 7.96% 12.03% 7.36% 6.12% 7.49%
PSG Wealth Global Creator FoF D 3.05% 11.47% 13.71% 7.61% 7.19% 8.69%
Reported in GBP
Fund 6 Month 1 Year 2 Year 3 Year 4 Year 5 Year
PSG Wealth Global Preserver FoF D GBP 1.19% -0.16% 8.48% 6.74% 6.91% 6.11%
PSG Wealth Global Flexible FoF D GBP 1.84% 3.26% 15.42% 10.47% 11.36% 9.67%
Source: PSG Wealth research team
Offshore funds performance
16.00%
14.00%
12.00%
10.00%
8.00%
6.00%
4.00%
2.00%
0.00%
-2.00%
-4.00%
3 Month 6 Month 1 Year 2 Year 3 Year 5 Year
PSG Wealth Global Preserver FoF D USD PSG Wealth Global Moderate FoF D USD PSG Wealth Global Flexible FoF D USD PSG Wealth Global Creator FoF D USD
Source: PSG Wealth research team data as at 31 May 2018 *Dots represent the relevant benchmark
All performance is reported in USD unless specified otherwise.
13 | PAGE PSG Wealth | Monthly Insights - June 2018PSG Wealth Offshore Solutions
PSG Wealth Offshore Fund of Funds (USD)
Source: PSG Wealth research team
PSG Wealth Offshore Fund of Funds (GBP)
Source: PSG Wealth research team
HOW TO READ THE BUBBLE CHARTS
Vertical axis shows the return of each fund Size of the bubble shows TER which is an indication of cost
Horizontal axis shows the downside deviation which is a measure of Grey bubbles indicate fund peers
downside risk that focuses on returns that fall below a
minimum threshold or minimum acceptable return (MAR) Gold bubbles represent PSG Wealth solutions
14 | PAGE PSG Wealth | Monthly Insights - June 2018PSG Wealth Offshore Solutions
PSG Wealth Global Preserver Fund of
Funds (USD)
• The PSG Wealth Global Preserver FoF USD made a
negative return of 0.07% for May, outperforming The basis for this decision was the potential
the benchmark GIFS USD Cautious allocation sector drawdown risk the fund brings into the FoF. Given
average, which delivered a negative 0.25%. its focus on real returns achieved through a high
• The PSG Wealth Global Preserver FoF USD ranked in allocation to a concentrated portfolio of equities,
the top quartile of its global sector over all periods our view is that the fund’s potential drawdowns
longer than 12 months and is ranked fourth out of could be too high for the conservative role the PSG
58 funds over the last five years. The FoF has delivered Wealth Global Preserver FoF plays in our global fund
1.82% per annum above the benchmark sector range. Ensuring the underlying fund’s mandate fits
average over 5 years. our FoF mandate is a key part of our investment
philosophy, and given that the Veritas fund is not a
Asset allocation good match for the Global Preserver FoFs mandate
we decided to disinvest from the fund.
Foreign bonds, 48.59
Foreign equity, 25.17
Foreign cash and money market, 19.97
Foreign other, 3.73
Foreign property, 2.6
Domestic bonds, 0.81
Domestic cash and money market, -0.8
Source: PSG Wealth research team
Risk and expectation: The portfolio has a high
equity allocation relative to peers and could
underperform during periods of strong equity
market declines, conversely the portfolio will
perform well when equity markets outperform
other asset classes. Rising global interest rates could
also result in capital losses on the fixed interest and
property portions of the portfolio, however this
impact is limited due to the FoF’s low bond duration,
1.25. Additionally, sufficient diversification through
its overweight allocation to equities to provide
some protection to the portfolio in the event of any
unexpected interest rate increases.
Radar: No funds are on the radar screens.
Changes: : The Veritas Global Real Return fund was
removed from the PSG Wealth Global Preserver FoF
during May, the proceeds were allocated equally to
the remaining five managers in the portfolio with
5% remaining in cash.
All performance is reported in USD unless specified otherwise.
15 | PAGE PSG Wealth | Monthly Insights - June 2018PSG Wealth Offshore Solutions
PSG Wealth Global Preserver Fund of PSG Wealth Global Moderate Fund of
Funds (GBP) Funds (USD)
• The PSG Wealth Global Preserver FoF GBP returned • The PSG Wealth Global Moderate FoF made a
2.38% for May in GBP, outperforming the benchmark negative return 0.58% for May, underperforming
GIFS GBP Cautious allocation sector average, which the GIFS USD Moderate Allocation sector average,
delivered 0.74%. which delivered negative 0.22%, but on par with the
• The PSG Wealth Global Preserver FoF GBP ranked the ASISA Global MA Flexible sector which returned
in the top quartile of its global sector over all a negative 0.06%.
measurement periods excluding the one-year period • The PSG Wealth Global Moderate FoF D has
and is ranked second from 28 funds over the last consistently outperformed the ASISA Global MA
five years. The FoF has delivered 3.15% per annum sector average for 3-month and 6-month periods,
above the benchmark sector average over five years. delivering 1.25% in excess returns per annum.
The FoF is ranked in the second quartile of Global
Asset allocation Moderate Allocation funds.
Asset allocation
Foreign bonds, 46.06
Foreign equity, 23.86 Domestic equity, 40.65
Foreign cash and money market, 24.29 Foreign equity, 22.5
Foreign other, 3.41
Domestic bonds, 16.97
Foreign property, 2.43
Domestic cash and money market, 10.91
Domestic bonds, 0.8
Domestic property, 6.35
Domestic cash and money market, -0.78
Foreign property, 1.72
Foreign cash and money market, 0.84
Foreign bonds, 0.05
Foreign other, 0.01
Source: PSG Wealth research team
Source: PSG Wealth research team
Risk and expectation: The portfolio has a high Risk: The portfolio is defensively positioned with a
equity allocation relative to peers and could developed market overweight and performance will
underperform during periods of strong equity likely be muted during periods of positive market
market declines, conversely the portfolio will sentiment when risky assets such as emerging markets
perform well when equity markets outperform outperform. The portfolio currently has 27.09% in
other asset classes. Rising global interest rates could bonds which could be negatively impacted by any
also result in capital losses on the fixed interest and unexpected interest rate increases. However, this risk
property portions of the portfolio, however this is mitigated to an extent by relatively large equity
impact is limited due to the FoF’s low bond duration, allocation, 60.02%
1.25. Additionally, sufficient diversification through Expectation: We expect volatility to remain high in
its overweight allocation to equities to provide the short term with fluctuating market sentiment in
some protection to the portfolio in the event of any global equity markets, the cash position provides a
unexpected interest rate increases. buffer against market downturns. Our underlying
Radar: The Schroder ISF Glbl MA Inc Acc GBP H has managers are also able to deploy this cash when
been added to the radar screen. they find more attractive opportunities in the
Changes: The Veritas Global Real Return fund was market. Interest rate risk is actively managed by our
removed from the PSG Wealth Global Preserver FoF underlying managers, with most positioned on the
during May, the proceeds were allocated equally to shorter end of the yield curve.
the remaining five managers in the portfolio with Radar: The MFS Meridian Global Total Ret l1 USD
5% remaining in cash. and the BGF Global Allocation A2 has been added to
the radar screen.
Changes: No changes made to underlying funds.
All performance is reported in USD unless specified otherwise.
16 | PAGE PSG Wealth | Monthly Insights - June 2018PSG Wealth Offshore Solutions
PSG Wealth Global Moderate Feeder Fund PSG Wealth Global Flexible Fund of
(ZAR) Funds (USD)
• The PSG Wealth Global Moderate FF D delivered a • The PSG Wealth Global Flexible FoF USD delivered
negative return of 0.47% in rand terms for May, 0.62% for May, outperforming the GIFS USD Flexible
underperforming the GIFS USD Moderate allocation allocation sector which returned a negative 0.11%.
sector average which delivered a negative 1.21%. • The PSG Wealth Global Flexible FoF USD ranked in
• The rand weakened by approximately 1.88% against the top quartile of its global sector over all periods
the US dollar over May, thus slightly increasing global from 3-months to since inception, and is ranked
portfolio returns reported in ZAR. eighth out of 66 funds over the last five years.
• The PSG Wealth Global Moderate FF D delivered • The FoF has delivered excess returns of 5.09% per
third quartile returns for all measurement periods annum above the sector average over the last five
below three years. years.
Asset allocation Asset allocation
Foreign bonds, 55.06
Foreign bonds, 28.11
Foreign equity, 82.69
Foreign cash and money market, 9.7
Foreign cash and money market, 11.92
Foreign other, 4.43
Foreign bonds, 3.96
Domestic cash and money market, 1.79
Foreign other, 0.78
Foreign property, 0.73
Foreign property, 0.66
Domestic equity, 0.1
Domestic bonds, 0.08
Source: PSG Wealth research team Source: PSG Wealth research team
Risk and expectation: We expect increased Risk and expectation: The portfolio currently has
volatility in the Rand over the short term, which an equity allocation of 81.08% which is above
could have a significant impact on ZAR returns for the average in the global flexible sector, thus the
our global funds. However, over longer periods portfolio will likely underperform should there be
(seven years +) we expect the currency effect will a significant correction in global equity markets.
be relatively flat and given the relative valuation of We expect volatility to remain high in the short
global assets, especially equities, we still believe the term with fluctuating market sentiment in global
fund offers good opportunities. equity markets, however we are confident that our
underlying managers will adjust the positioning of
their portfolios as they find opportunities that offer
good returns relative to the risk taken.
Radar: No funds on the quantitative or qualitative
radar.
Changes: Disinvested from the Sarasin Global
Real Estate Equity fund and invested the proceed
in the Veritas Global Real return fund. The basis
for this is due to qualitative concerns due to
significant changes in the management team
of the portfolio, combined with the focus on
implementing split funding in the portfolio. The
Sarasin Global Real Estate Equity fund’s portfolio
manager (Guy Mountain) and the deputy portfolio
manager (Geoffrey Armstrong) both resigned from
Sarasin. The real estate fund is not suited for the
unconstrained multi asset flexible nature of the PSG
Wealth Global Flexible FoF.
All performance is reported in USD unless specified otherwise.
17 | PAGE PSG Wealth | Monthly Insights - June 2018PSG Wealth Offshore Solutions
PSG Wealth Global Flexible Fund of Funds PSG Wealth Global Creator Feeder Fund
(GBP) (ZAR)
• The PSG Wealth Global Creator FF D delivered a return
• The PSG Wealth Global Flexible FoF GBP returned
of 1.79% for May in rand terms, outperforming the
3.62% in GBP for May, outperforming the benchmark
global sector average which returned 1.26%, as well
GIFS GBP Flexible allocation sector average which
as the ASISA Global Equity General sector, which
delivered 0.70%.
returned 0.96%.
• The PSG Wealth Global Flexible FoF GBP ranked in
• The rand weakened by approximately 1.88% against
the top quartile of its global sector overall periods
the US dollar over May, thus slightly increasing global
from 12 months to since inception, and is ranked
portfolio returns reported in ZAR.
fifth out of 60 funds over the last five years. The FoF
• The PSG Wealth Global Creator FF D delivered top
has delivered excess returns of 5.95% per annum
quartile returns since inception. Over the last four
above the sector average over this period.
years the FF outperformed the ASISA Global Equity
General sector average by 2.78% per annum.
Asset allocation
Asset allocation
Foreign equity, 83.06
Foreign cash and money market, 10.11
Foreign bonds, 3.69
Foreign property, 1.1 Foreign equity, 94.29
Domestic cash and money market, 1.01 Foreign cash and money market, 3.94
Foreign other, 0.73 Foreign property, 1.49
Domestic equity, 0.31 Domestic cash and money market, 0.28
Source: PSG Wealth research team
Source: PSG Wealth research team
Risk and expectation: The portfolio currently has
an equity allocation of 83.07% which is above
the average in the global flexible sector, thus the Risk and expectation: We expect increased
portfolio will likely underperform should there be volatility in the rand over the short term, which
a significant correction in global equity markets. could have a significant impact on ZAR returns for
We expect volatility to remain high in the short our global funds. However, over longer periods
term with fluctuating market sentiment in global (seven years +) we expect the currency effect will
equity markets, however we are confident that our be relatively flat and given the relative valuation of
underlying managers will adjust the positioning of global equities we still believe the fund offers good
their portfolios as they find opportunities that offer opportunities.
good returns relative to the risk taken.
Radar: The Schroder ISF Glbl MA Inc C Acc GBP H
has been added to the radar screen.
Changes: Disinvested from the Sarasin Global Real
Estate Equity fund and invested the proceed in the
Veritas Global Real return fund.
All performance is reported in USD unless specified otherwise.
18 | PAGE PSG Wealth | Monthly Insights - June 2018PSG Wealth Offshore Solutions
PSG Wealth Global Creator Fund of Funds
(USD)
• The PSG Wealth Global Creator FoF returned
1.01% for May, outperforming the benchmark Risk: Most of our underlying managers remain
GIFS Global Large-Cap Blend equity sector which relatively defensively positioned, with a preference
delivered a negative 0.02% and the MSCI World for high quality stocks with very strong balance
Index which returned 0.06%. sheets, strong moats and steady earnings outlooks.
• The PSG Wealth Global Creator FoF is ranked in Given the high allocation to quality large caps, mostly
the second quartile of global equity funds since in developed markets, we expect to underperform
inception in December 2012. global markets when sentiment is very positive and
relatively risky assets, such as emerging market
equities, perform strongly (risk-on trade).
Asset allocation
Expectation: We are confident that our underlying
managers will adjust the positioning of their
portfolios (including exposure to emerging markets)
as they find opportunities that offer good returns
relative to the risk taken. We expect volatility to
Foreign equity, 94.55 remain high in the short term with fluctuating
Foreign cash and money market, 3.95 market sentiment in global equity markets, thus
Foreign property, 1.5 we are comfortable with the overall defensive
positioning of our fund.
Radar: Nedgroup Global Equity funds were added
to the quantitative radar screen.
Source: PSG Wealth research team
All performance is reported in USD unless specified otherwise.
19 | PAGE PSG Wealth | Monthly Insights - June 2018PSG Wealth Equity Portfolios
Performance table
PSG Wealth Equity portfolios
Fund 1 Month 3 Months 6 Months 12 Months Since
inception
PSG Wealth SA Equity Portfolio -3.73% -3.46% 0.79% 8.19% 9.01%
PSG Wealth SA Property Portfolio -4.09% 2.26% -1.60% 0.49% -1.87%
PSG Wealth Offshore Equity Portfolio (USD) -1.56% -2.98% 0.43% 12.08% 13.11%
PSG Wealth SA Dividend Income Equity Portfolio -7.05% -6.24% 3.60% 13.80% 6.55%
PSG Wealth Managed Volatility Equity Portfolio -3.92% -4.02% 2.27% 3.56% 2.66%
Source: PSG Wealth research team
PSG Wealth SA Equity Portfolio
Appropriate for investors seeking real returns
in capital that exceed the local equity market
returns, but who are comfortable with the capital
fluctuations that characterizes an investment of this type.
PSG Wealth
SA Managed
Volatility Equity
PSG Wealth
Tailored for investors who
Offshore Equity
require a smoother path
Portfolio
to long-term returns by
Appropriate for
reducing downside risk while Overview investors seeking real returns
maintaining full exposure of equity in capital that exceed the
to the equity risk premium
in the long run. Benefits of portfolios international benchmark
returns.
this strategy should be more
pronounced during periods of
heightened volatility.
PSG Wealth SA Dividend PSG Wealth SA Property
Income Equity Portfolio Equity Portfolio
Suitable to the investor that For the more risk adverse investor
requires a regular and growing stream of who requires a regular income.
income derived from dividends with the
potential of a real growth in capital value.
20 | PAGE PSG Wealth | Monthly Insights - June 2018PSG Wealth Equity Portfolios
PSG Wealth SA Equity Portfolio
• The PSG Wealth SA Equity Portfolio made a negative
Expectations:
return of 3.73%, while the FTSE/JSE Capped All Share
• Equity market returns are slightly behind their long-
TR made returned negative 5.68% for May.
term averages.
• Thirteen (59%) of the 22 stocks in this portfolio ended
• With multiples ahead of their long-term averages,
above its benchmark last month.
we expect returns to materialise primarily through
growth in earnings and not through a material
Performance since inception change in valuation multiples.
• We expect value to outperform growth and have
10.00% tilted the portfolio’s exposure accordingly.
8.00% • Our largest underweight position is towards the
6.00%
consumer stable sector primarily due to concerns
regarding the valuation of food and drug retailers.
4.00%
• Our foreign exposure is through domestic
2.00% investments with international exposure rather than
0.00% through pure rand hedges which we feel offer less
value.
-2.00%
• Selected large rand-hedges, however, continue to
-4.00% hold value on a relative basis.
-6.00% • Exchange rate movements will remain a dominant
1 Month 3 Month 6 Month 12 Month Since Inception driver of short-term equity market returns.
• Sensible policy changes by a new administration
PSG Wealth SA Equity Portfolio could become a tailwind.
Source: PSG Wealth research team data as on 31 May 2018 • A weaker exchange rate is likely to be a headwind
*Inception date: 30 August 2015 to relative returns but given the diversification of
the portfolio and the quality of its investments, we
believe its performance should not be fundamentally
Asset allocation
dependent on exchange rate movements.
• Global investment markets are expected to remain
volatile given the difficulty to forecast macro
Materials variables.
Telecommunication services • Our focus will remain on the underlying fundamentals
Consumer discretionary of the individual companies rather than on broad
Consumer staples macro-issues.
Financials
Healthcare Risk:
Industrials • Changes in the perception of sovereign risk (positive
Cash and negative) and its flow through to exchange- and
interest rates, can have an impact on portfolio values.
• Accommodative monetary policy continues to
Source: PSG Wealth research team provide support to developed economies and creates
artificial demand for high yielding emerging market
securities. Should foreign capital inflows from these
markets end abruptly, it will have an adverse impact
on market valuations.
• The portfolio is likely to underperform should
international monetary easing prove sustainable. An
environment of sustained monetary easing should
support ‘bond-proxy stocks’ to which the portfolio is
under exposed to due to our valuation concerns. This
could lead to portfolio underperformance.
• Overestimating growth and operational
improvements in highly-rated and large benchmark
constituents.
21 | PAGE PSG Wealth | Monthly Insights - June 2018PSG Wealth Equity Portfolios
PSG Wealth SA Property Portfolio
• The PSG Wealth SA Property Equity Portfolio made a
negative return of 4.09% during May, outperforming Expectations:
the FTSE/JSE SA Listed Property Capped TR which • The sluggish economic environment will continue
returned a negative 5.30% to place pressure on the real estate sector.
• Thirteen (72%) of the 18 stocks in the portfolio • There is generally an oversupply of office space.
performed above its benchmark. New local developments could lead to a higher
supply while demand is weak.
Performance since inception • Demand for vacant space will remain muted,
placing further pressure on rentals. Weak
3.00% economic growth might result in higher vacancy
profiles and rental reversions.
2.00%
• Due to the highly competitive and weak market
1.00% dynamics, attracting and retaining tenants has
0.00% become costlier with retail companies increasing
-1.00% incentives for tenants.
• Improving tenant retention rates have come at
-2.00%
the expense of lower escalations.
-3.00% • Capital market changes generally dominate
-4.00% short-term returns.
-5.00%
•
1 Month 3 Month 6 Month 12 Month Since Inception Risk:
• Weaker-than-expected growth could erode
PSG Wealth SA Property Portfolio
dividends underpinning the current valuations.
Disclaimer: Annualised for periods greater than one year
• Cannibalization is a risk in the retail segment.
• Low global bond yields have aided valuations –
Source: PSG Wealth research team data as on 31 May 2018
a reversal of this trend and tighter US monetary
*Inception date: 1 December 2015
policy could impact valuations.
• Changes in sovereign risk (positive and negative)
Asset allocation and its flow through to capital markets can
have a significant impact on valuations.
• Value-destructive acquisitions, especially in
offshore territories where management has less
experience, could impact the portfolio.
Diversified REITs • Liquidity risk which could lead to the inability to
Real estate operating companies sell underperforming assets quickly.
Retail REITs
Cash
Source: PSG Wealth research team
22 | PAGE PSG Wealth | Monthly Insights - June 2018PSG Wealth Equity Portfolios
PSG Wealth Offshore Equity Portfolio Performance since inception
• The PSG Wealth Offshore Equity Portfolio made
14.00%
a negative return of 1.56% (USD) in May,
12.00%
underperforming the Dow Jones Global Titans 50 TR
that delivered a positive return of 1.49% 10.00%
• Four (27%) of the 15 stocks in this portfolio ended 8.00%
above its benchmark. 6.00%
4.00%
2.00%
Expectations:
0.00%
• Investment markets are expected to remain
volatile given the high amount of uncertainty in -2.00%
forecasting macro variables. -4.00%
1 Month 3 Month 6 Month 12 Month Since Inception
• Given the diversification of the portfolio and
the quality of its chosen investments, we believe PSG Wealth Offshore Equity Portfolio (USD)
that the impact of macro variables should be
Disclaimer: Annualised for periods greater than one year
reduced.
• Our focus will remain on the underlying Source: PSG Wealth research team data as at 31 May 2018
*Inception date: 30 August 2015
fundamentals of the individual companies rather
than on broad macro issues.
Asset allocation
Risk:
• Sustained international monetary easing
creates demand for quality, stable, high yielding Telecommunication services
equities. This provides a valuation underpin to Consumer discretionary
investments in the portfolio. The portfolio is Consumer staples
likely to underperform should this deteriorate. Financials
Healthcare
Information technology
Cash
Source: PSG Wealth research team
23 | PAGE PSG Wealth | Monthly Insights - June 2018PSG Wealth Equity Portfolios
PSG Wealth SA Dividend Income Equity Performance since inception
Portfolio
15.00%
• The PSG Wealth SA Dividend Income Equity Portfolio
made a negative return of 7.05% during the month.
10.00%
Underperforming the benchmark, the FTSE/JSE
Dividend Plus TR, which made a return of negative
5.00%
5.66% over the same period.
• Eight (40%) of the 20 stocks in this portfolio came in
0.00%
above the benchmark.
-5.00%
-10.00%
Expectations: 1 Month 3 Month 6 Month 12 Month Since Inception
• Investment markets are expected to remain
volatile given the difficultly to forecast macro PSG Wealth SA Dividend Income Equity Portfolio
variables. Disclaimer: Annualised for periods greater than one year (since inception)
• A shift from highly-valued, high-quality defensive Source: PSG Wealth research team data as at 31 May 2018
stocks towards more reasonable priced consumer *Inception date: 29 April 2016
cyclicals and financial stocks in the medium term.
Asset allocation
Risk:
• Changes in the perception of sovereign risk
(positive and negative) and its flow through to Materials
exchange rates and interest rates can have an Telecommunication services
impact on portfolio values. Consumer discretionary
• The portfolio is likely to underperform should Consumer staples
Energy
international monetary easing prove sustainable.
Financials
An environment of sustained monetary easing Healthcare
should support ‘bond-proxy stocks’ to which the Industrials
portfolio is under exposed to due to valuation Cash
concerns.
Source: PSG Wealth research team
24 | PAGE PSG Wealth | Monthly Insights - June 2018PSG Wealth Equity Portfolios
PSG Wealth SA Managed Volatility Equity Performance since inception
Portfolio
4.00%
• The PSG Wealth SA Managed Volatility Equity
3.00%
Portfolio made a negative return of 3.92% for May,
2.00%
outperforming the benchmark, the PSG Wealth
Custom Low Volatility Index TR, which ended the 1.00%
month at negative 6.07%. 0.00%
• Twelve (57%) of the 21 stocks in this portfolio came -1.00%
in above the benchmark. -2.00%
-3.00%
-4.00%
Expectations:
-5.00%
• The valuation of most benchmark constituents
1 Month 3 Month 6 Month 12 Month Since Inception
currently seems elevated.
• Relative outperformance against the benchmark PSG Wealth SA Managed Volatility Equity Portfolio
through not owning the most expensive pockets Disclaimer: Returns annualised since inception
of shares.
Source: PSG Wealth research team data as at 31 May 2018
• Lower portfolio drawdown, while still *Inception date: 28 July 2016
participating in equity market returns.
• Low volatility investing in a defensive way to
take risks. Asset allocation
• Portfolio outperformance relative to local equity
markets during periods of stress.
• Positive relative performance over the longer
Materials
term. Consumer discretionary
Consumer staples
Risk: Financials
• A negative performance relative to the local Healthcare
equity market during strong bull markets. Industrials
Cash
Source: PSG Wealth research team
25 | PAGE PSG Wealth | Monthly Insights - June 2018Other publications
Previous publications
Daily Weekly
27 June 20 Jun 08 Nov 10 May 09 Nov 15 Jun
13 Jun 18 Oct 03 May 02 Nov 08 Jun
06 Jun 11 Oct 19 April 26 Oct 01 Jun
23 May 04 Oct 12 April 12 Oct 25 May
16 May 20 Sept 05 April 05 Oct 18 May
09 May 13 Sept 22 Mar 28 Sept 11 May
18 Apr 06 Sept 15 Mar 14 Sept 04 May
11 Apr 23 Aug 08 Mar 07 Sept 26 Apr
04 Apr 16 Aug 01 Mar 31 Aug 20 Apr
22 Mar 03 Aug 15 Feb 17 Aug 12 Apr
14 Mar 19 July 06 Feb 10 Aug
07 Mar 12 July 18 Jan 02 Aug
07 Feb 21 Jun 11 Jan 27 Jul
17 Jan 14 Jun 14 Dec 13 Jul
06 Dec 07 Jun 07 Dec 06 Jul
22 Nov 31 May 30 Nov 29 Jun
15 Nov 17 May 16 Nov 22 Jun
Monthly Research and Strategy Report
May 2018 Jun 2017 Jul 2016 Autumn 2018 Summer 2017
Apr 2018 May 2017 Jun 2016 Summer 2018 Spring 2016
Mar 2018 Apr 2017 May 2016 Spring 2017 Winter 2016
Feb 2018 Mar 2017 Apr 2016 Winter 2017 Autumn 2016
Jan 2018 Feb 2017 Mar 2016 Autumn 2017 Summer 2016
Nov 2017 Jan 2017 Feb 2016
Oct 2017 Nov 2016 Dec 2015
Sep 2017 Oct 2016 Nov 2015
Aug 2017 Sep 2016 Oct 2015
July 2017 Aug 2016
Special report Wealth Perspective
New offshore brochure Mar 2018
Volatility is uncomfortable, but expected Dec 2017
Stocks that could outperform in stronger Sept 2017
economy Jun 2017
New ANC leader, too close to call Mar 2017
Our exposure to Steinhoff Dec 2016
Local currency downgraded to junk Sep 2016
Blockchains and Bitcoins Jul 2016
UK snap election Apr 2016
Berkshire 2017 AGM Jan 2016
Distributions explained Oct 2015
S&P junk status
Research provided
Fed hike inevitable?
S&P 2 Dec review
US election
Market PE’s
Local government elections
Brexit vote
26 | PAGE PSG Wealth | Monthly Insights - June 2018Disclaimer PSG Wealth is a brand underneath PSG Konsult Ltd, which consists of the following legal entities: PSG Multi-Management (Pty) Ltd, PSG Securities Ltd, PSG Fixed Income and Commodities (Pty) Ltd, PSG Scriptfin (Pty) Ltd, PSG Invest (Pty) Ltd, PSG Life Ltd, PSG Employee Benefits Ltd, PSG Trust (Pty) Ltd, and PSG Wealth Financial Planning (Pty) Ltd. Affiliates of the PSG Konsult Group are authorised financial services providers. The opinions expressed in this document are the opinions of the writer and not necessarily those of PSG Konsult Group. The information is provided as general information. It does not constitute financial, tax, legal or investment advice and the PSG Konsult Group of Companies does not guarantee its suitability or potential value. Although the utmost care has been taken in the research and preparation of this document, no responsibility can be taken for actions taken on information in this document. Should you require further information, and since individual needs and risk profiles differ, we suggest you consult a qualified financial adviser, if needed. Collective Investment Schemes in Securities (CIS) are generally medium- to long-term investments. The value of participatory interests (units) may go down as well as up and past performance is not a guide to future performance. CIS are traded at ruling prices and can engage in borrowing and scrip lending. A fund of funds is a portfolio that invests in portfolios of collective investment schemes, which levy their own charges, which could result in a higher fee structure for these portfolios. Fluctuations or movements in the exchange rates may cause the value of underlying international investments to go up or down. A schedule of fees and charges and maximum commissions is available on request from PSG Collective Investments Limited. Commission and incentives may be paid and if so, are included in the overall costs. Forward pricing is used. The portfolios may be capped at any time in order for them to be managed in accordance with their mandate. Different classes of participatory interest can apply to these portfolios and are subject to different fees and charges. Figures quoted are from I-Net, Stats SA, SARB, © 2015 Morningstar, Inc. All Rights Reserved for a lump sum using NAV-NAV prices net of fees, includes income and assumes reinvestment of income. PSG Collective Investments Limited is a member of the Association for Savings and Investment South Africa (ASISA) through its holdings company PSG Konsult Limited. Conflict of Interest Disclosure: The fund may from time to time invest in a portfolio managed by a related party. PSG Collective Investments Limited or the Fund Manager may negotiate a discount on the fees charged by the underlying portfolio. All discounts negotiated are reinvested in the fund for the benefit of the investor. Neither PSG Collective Investments Limited nor the Fund Manager retain any portion of such discount for their own accounts. PSG Multi-Management (Pty) Ltd (FSP No. 44306), PSG Asset Management (Pty) Ltd (FSP No. 29524) and PSG Collective Investments Limited are subsidiaries of PSG Group Limited. The Fund Manager may use the brokerage services of a related party, PSG Securities Ltd.
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