Thinking long-term in an unpredictable future
I recently attended a feedback session by business leaders who were members of the South African delegation to the World Economic Forum in Davos. One of the striking comments was how significantly the tone towards South Africa had shifted in a year. Twelve months ago we were the pariah of the world facing an imminent downgrade. At the same time, the rand was trading above R16 to the dollar… and investors were rushing to take their money offshore.
This year the focus has shifted away from South Africa (and Africa) to global issues and particularly the implications of Brexit and of a Trump presidential victory.
On reflection, what can we learn from this?
- Firstly, the future is unbelievably difficult to predict.
- Secondly, markets have very short memories and often react (and overact) to the noise on the front pages.
- And thirdly, when investors react to short-term emotion, which is extremely natural, it often undermines long-term returns.
There are few ‘no-brainers’ in investing. We believe that the tax-free investment introduced by National Treasury at the time of the 2015 Budget is one of these ‘no-brainers’ and provides an opportunity that most investors should take advantage of. The vehicle allows investors to invest up to R30 000 per annum tax-free (no income-, dividend- or capital gains tax). Our offering is simple and provides investors access to our range of funds at no extra cost. The deadline for the current tax year is 28 February 2017 and investors are reminded that they are able to invest on behalf of their spouses and children to maximise the benefit.
Nedgroup Investments’ business proposition is to help you achieve your investment goals by delivering good long-term performance and making it easy and simple to do business with us. A key component of this proposition is our Best of Breed™ philosophy which sees us identify and partner with fund managers who we believe have a sustainable edge in their area of expertise.
We recently attended the Raging Bull awards - which measured performance to the period ended 31 December 2016 – where Nedgroup Investments won a number of awards. These awards measured performance across our range of funds taking into account performance, risk-management and consistency over a five-year period. The methodology gives higher weightings to larger funds and so is a reasonable proxy for the performance our clients have achieved. Our individual funds won eight awards - but more importantly we won the best Offshore Management Company, and won 3rd best South African Management Company.
Although the recognition is pleasing, what is more important to note is the consistency of the range’s performance over the past decade. Nedgroup Investments has been among the top three managers for the each of the past eight years. And while these awards provide some comfort that our philosophy has been working, we remain committed to working flat-out to refine our process and philosophy, and to continually learn from our mistakes.
We are committed to making it simple and easy for you to do business with us and have a number of exciting initiatives in the pipeline to facilitate this. We have also made it much easier to transact with us online. For existing investors, it is now very quick and easy to add, switch and withdraw from your investments and no forms or signatures are required. If you have not yet registered for our secure site I encourage you to go to www.nedgroupinvestments.com and do so.