I ask not for a lighter burden, but for broader shoulders…
As we mark the halfway point in 2021, South Africa is facing the third wave of the Coronavirus pandemic, even more severe than the first two waves. Lockdown level 4 has been implemented in an attempt to stem the increasing infection rates, as hospitals struggle to deal with the caseload. Our economy is still under severe pressure from the impact of the hard lockdown of 2020 and the impact it had on business activity and unemployment. Apart from the tragic toll on human lives, much economic hardship has also been inflicted on many. While the developed world seems to be dealing with the virus efficiently through their vaccine programs, emerging markets are still experiencing significant headwinds in sourcing and administering vaccines. The so-called Delta variant is also a major cause for concern. We wish you safety and strength during this difficult time.
Central banks globally are still in emergency “mode” and, despite higher inflation (which we have been talking about at length since last year), are communicating that accommodative monetary policy (low interest rates and quantitative easing) will be maintained in the foreseeable future. This should prove supportive of capital markets in the short run. Structurally higher inflation, however, will at some point move central banks towards “tapering” quantitative easing and adjusting interest rates higher. Coupled with high valuations, financial markets may exhibit increased volatility at some point in the next 12 months or so. As always, we suggest a strategy of broad diversification to ensure effective risk management.
We have just concluded our Trust and Fiduciary series and hope you found it useful. Do not hesitate to contact Savannah, should you need your trust and will to be reviewed. It is a good idea to revisit these aspects from time to time, as circumstances change and may have an impact on your asset preservation and legacy planning.
In line with our strategy of establishing a strong team of substance, I am glad to inform you that we have appointed Heinrich van der Merwe as a research analyst. Heinrich is a Chartered Accountant (SA) and completed his articles at PWC. Heinrich will focus on fundamental research and analysis and we look forward to the contribution he will make to the investment process and the quality of our company analysis. Look out for Heinrich’s article on Afrimat and the work we have done assessing the merit of adding Afrimat shares to your portfolios.
Our unit trust, which we launched three months ago, is performing very well. It is very early days, but since we launched the fund we have delivered a strong result. The fund’s performance is in the top quartile of all the unit trusts of its category. The unit trust has been purpose-built for investors in Living Annuities or who need to generate income from their investments. Contact us should you want to discuss the fund in more detail.
As always, we are just a Zoom Meeting, Teams meeting or telephone call away, please contact us should you require assistance.
Best wishes,
Benjamin van Wyk
