MEETING PURPOSE
Our investment team aim to meet every week to discuss the macro environment and how this could impact our current and future portfolio construction.
KEY TAKEAWAYS
- Markets showing complacency despite geopolitical tensions; minimal reaction to Israel-Iran conflict
- Consensus on maintaining a barbell investment approach: emerging market value/commodities + AI/tech stocks
- U.S. dollar weakness a key trend benefiting commodities and emerging markets
TOPICS
Market Overview
- Equities largely unperturbed by recent events
- U.S. bond yields stable; yield curve inversion persisting
- DXY (US Dollar Index) showing weakness, particularly vs. Euro
- Commodities strengthening oil up 20% in past month, gold and PGMs are firm
Geopolitical Situation
- Limited global market impact to the Israel-Iran conflict so far
- Potential for regime change in Iran could reshape Middle East dynamics
- China focused on domestic economic recovery, recent retail numbers are positive
Portfolio Positioning
- Debate over chasing rallies vs remaining cautious given risks
- Added to iShares EM value factor ETF, S&P 500 and silver ETFs in the International Managed Flexible Fund
- Considering increasing Satrix Resi ETF exposure in SA funds
- Maintaining “barbell” of commodities/gold and technology stocks
Investment Strategy
- Maintain barbell approach: emerging market value/commodities + AI/tech stocks
- Gold seen as good hedge against tail risks; central bank buying supportive
- South African equities benefiting from global factors, not domestic improvements
Market Dynamics
- Retail investors and algorithms potentially masking underlying issues
- Passive flows into indices making it difficult for active managers
- Debate over efficiency of markets in pricing in all information
US Market Drivers
- U.S. corporate buybacks estimated at $1 trillion for the year
- Combined $1.5 trillion in “natural U.S. buyers” providing market support
Next Steps
- Maintain current barbell investment approach
- Monitor headlines closely; be prepared for quick strategy meeting if major news breaks
- Continue to evaluate opportunities in emerging markets, commodities and AI/tech sectors
The content of this article is for information purposes only and does not constitute an offer or invitation to any person. The opinions expressed are subject to change and are not to be interpreted as investment advice. You should consult an adviser who will be able to provide appropriate advice that is based on your specific needs and circumstances. The information and opinions contained herein have been compiled or arrived at from sources believed to be reliable and given in good faith, but no representation is made as to their accuracy, completeness or correctness.3