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 broadly bullish, especially equities, with some consolidation in commodities
- Team maintaining current positioning but added some protection via structured solutions in an external AMC
- Positive outlook on gold/precious metals, banks, and select SA retailers like Shoprite and PEP Stores – short and medium term
- Watching for potential US equity rotation from tech to mid-caps/value if rate cuts begin
TOPICS
Market Overview
- Equities broadly bullish, with S&P 500 up 10.5% YTD and MSCI World up 13.3%
- SA equities outperforming, with ALSI up 32% and Top 40 up 36% YTD in USD terms
- Global Fixed income returns muted at 2-5% YTD in USD terms
- Emerging markets rebounding, up 20% YTD in USD terms
- Volatility low and Bitcoin is performing well
Portfolio Positioning
- Maintaining current allocations but adding some downside protection where possible
- Slightly underweight US equities, overweight non-US developed markets
- Neutral on emerging markets, overweight SA equities with protection
- Bullish on gold/precious metals, banks, select SA retailers (Shoprite, PEP)
- Cautious on general SA retailers due to consumer pressure
Technical Analysis
- Most equity markets in clear uptrends, some consolidating recent gains
- Gold can potentially breakout of long-term base, silver lagging but poised to follow
- Commodities basing after pullback, watching for potential breakout
- Rand showing strength, approaching key 17.50 level vs USD
Economic Outlook
- Fiscal spending strong globally, supporting growth outlook
- Widespread interest rate cuts outside US, Fed expected to begin cutting
- Dollar expected to gradually weaken, supporting commodities/EM
- Potential for global growth and corporate earnings to accelerate
Fund Updates
- Offshore flagship fund up 18-19% over past 18 months in USD, in line with sector benchmark
- Local fund (IP Active Beta) benefiting from SA equity outperformance
- Implementing structured equity protection strategy for downside mitigation
- Considering adding to healthcare/energy/forward looking quality equity exposure via Guinness fund in offshore fund
Next Steps
- Maintain current positioning but continue monitoring for rotation signals
- Consider adding to Guinness equity income in our offshore fund for healthcare/energy/quality equity exposure
- Oscar to continue research on global infrastructure investment options
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