Latest stats show that the world economy is valued at an estimated $84 971.65bn. Of that, 20 emerging market countries account for 34% or $28 890.14bn – South Africa’s economy alone contributes 0,5% ($435.55bn) to the global economy but a significant 1.5% to the emerging markets. Our Emerging Market series, delves into how the South African market has been able to manage this performance over the last 20 years.
Experience in delivering a ‘best investment view’ at all times
With decades’ worth of collective experience in the fixed income market, we reflect on the journey to provide meaningful and sustainable returns in the ever-popular multi-asset income category. Following is not only a journey that spans 25 years in the South African (SA) fixed income (FI) market, but also in educating clients that to understand FI, you need to understand yield, and how SA and emerging markets (EM) are joined at the hip. A lesson to be drawn is how the combination of active management and best investment views contribute towards long-term incremental outperformance.
Erik Nel, CIO & Co-Portfolio Manager of Terebinth Capital, Managers of the Amplify SCI* Strategic Income Fund
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No such thing as a free lunch
Hedge funds have more to offer than the promise of great returns. Hedge fund strategies broadly fall into two categories – return enhancers and risk diversifiers. While most investors have only come into contact with the return enhancer, the case for using hedge funds as a risk diversifier needs to be amplified.
Emma Pretorius, Business Development Manager at Amplify Investment Partners
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Integrated decisions that impact investment returns
With developed market equities overvalued, emerging markets offer relative value, especially South Africa. With this relative value and the attractiveness of the real yield from South African 10-year bonds, South African fund managers are considering the array of opportunities presented by additional offshore allocations facilitated by recent exchange control adjustments. However, they are also aware of the need to factor in any unexpected consequences of this relaxation that may impact their investment strategies.
Brian Thomas and Omri Thomas, Portfolio Managers of Amplify mandates
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Seeking opportunities in the SA equity market
In-depth and long-term knowledge of South Africa’s companies, politics, economy and other local investment drivers provides a competitive advantage for fund managers which should not be underestimated. This knowledge and expertise provide meaningful investment returns that are not easily replicated when it comes to finding offshore investment opportunities. When seeking opportunities in the local equity market, a bottom-up valuation process that identifies quality businesses is key, alongside a comprehensive understanding of the local market. This also includes access to unlisted companies which we are sometimes more able to engage than listed companies (that, for example, may be in a closed period), to provide information that can impact investment decisions.
Jonathan du Toit, Portfolio Manager of the Amplify SCI* Managed Equity Retail Hedge Fund
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