Ca$h, Ca$h, Baby
Finweek English|21 November 2019
Fixed-income assets, such as cash and bonds, have outperformed most equity returns over the medium term as South Africa’s economic and policy woes weigh heavily on listed companies. A slew of corporate governance failures didn’t inspire confidence in the once returns-lucrative stock market. Will cash continue to have the edge?
Jaco Visser
Ca$h, Ca$h, Baby

pensioners and retail investors are turning to fixed-income investments to protect their invested capital against the lacklustre performance of equity investments. The FTSE/JSE All Share Index returned 11.49% over the 12 months ending 31 October. The All Bond Index returned 12.96% over the same period.

Retirees, who rely on capital growth in order to withdraw an annual income and ensure their capital lasts until they die, are especially hard-pressed when equity returns slump.

No wonder investors shifted their capital from pure equity funds to either fully interest-bearing funds, those invested in cash and bonds; or those with a sizeable allocation to these assets, also called multi-asset funds.

Data from the Association for Savings and Investments SA (Asia) which, among others, monitors flows into and between funds, showed that interest-bearing collective investment schemes – typically your income, money market and bond funds – saw a net inflow of R87.55bn over the 12 months through the end of September.

Pure equity unit trusts saw outflows of R2.3bn, and multi-asset funds, which include balanced funds, saw inflows of R32.35bn over the same period.

“Several factors contributed to bonds’ performance in 2019,” says Londa Nxumalo, portfolio manager at Allan Gray. “These include falling global bond yields, consistently benign inflation prints in SA and local investors rotating out of equities into bonds.”

Importing cheap rates

Much commentary was expensed this year as bonds’ yield curve inverted in the developed markets. What does it mean, though?

Diese Geschichte stammt aus der 21 November 2019-Ausgabe von Finweek English.

Starten Sie Ihre 7-tägige kostenlose Testversion von Magzter GOLD, um auf Tausende kuratierte Premium-Storys sowie über 8.000 Zeitschriften und Zeitungen zuzugreifen.

Diese Geschichte stammt aus der 21 November 2019-Ausgabe von Finweek English.

Starten Sie Ihre 7-tägige kostenlose Testversion von Magzter GOLD, um auf Tausende kuratierte Premium-Storys sowie über 8.000 Zeitschriften und Zeitungen zuzugreifen.

WEITERE ARTIKEL AUS FINWEEK ENGLISHAlle anzeigen
THE HEALTH OF SA'S MEDICAL SCHEMES
Finweek English

THE HEALTH OF SA'S MEDICAL SCHEMES

As the Covid-19 pandemic abates, finweek takes a look at the financial performance of some of the largest players.

time-read
7 Minuten  |
5 November 2021
The effect of Gilbertson's departure
Finweek English

The effect of Gilbertson's departure

With Ntsimbintle Holdings now the major shareholder of Jupiter Mines, it could change SA’s manganese industry.

time-read
3 Minuten  |
5 November 2021
Making money from music
Finweek English

Making money from music

Why investors are increasingly drawn to the music industry.

time-read
3 Minuten  |
5 November 2021
Conviction is key
Finweek English

Conviction is key

Sandy Rheeder plays a critical role in Mukuru’s mission to open up financial services to the emerging consumer market in Africa through tailor-made technology solutions and platforms.

time-read
5 Minuten  |
5 November 2021
The post-pandemic toolkit
Finweek English

The post-pandemic toolkit

How CFOs can use technology to support growth.

time-read
4 Minuten  |
5 November 2021
Big city living exodus
Finweek English

Big city living exodus

Mini cities like Waterfall City and Steyn City are redefining city-style apartment living.

time-read
3 Minuten  |
5 November 2021
Big compact, big value
Finweek English

Big compact, big value

Handsome, with a hefty level of standard specification, the roomy Haval Jolion compact crossover is a great value proposition.

time-read
3 Minuten  |
5 November 2021
On barriers to entry
Finweek English

On barriers to entry

There are various ways in which a company or sector can achieve competitive dominance. They usually make for good investments.

time-read
2 Minuten  |
5 November 2021
Fear and greed in one index
Finweek English

Fear and greed in one index

To buck the trend, when markets are hot or cold, is a tough thing to do. However, it can deliver solid returns.

time-read
3 Minuten  |
5 November 2021
Africa's largest data centre facility coming soon
Finweek English

Africa's largest data centre facility coming soon

Vantage Data Centers plans to invest over R15bn for its first African data centre facility in Attacq’s Waterfall City.

time-read
3 Minuten  |
5 November 2021