In May the average prudential balanced portfolio returned 1.52% (April: 1.36%). Top performer is Namibia Asset Managers (2.74%); Investment Solutions (0.75%) takes the bottom spot. For the 3 month period Investment Solutions is top performer outperforming the ‘average’ by roughly 0.6%. On the other end of the scale Investec underperformed the ‘average’ by 1.2%.

At this stage local and offshore equity may be expected to remain the best performing asset class for the next 12 months as the result of monetary stimulus measures being maintained globally, despite the fact that markets are already expensive. There is a chance of interest rates being raised in the US later this year although the US government will not really be able to shoulder anything but a minute increase in interest rates due to its high indebtedness, unless this was accompanied by increasing inflation. 

Local interest rates may well be increased again soon by the SA Reserve Bank particularly in view of the down grading of SA’s credit rating by Standard & Poors to BBB-, one level above junk, while Fitch lowered the outlook on its BBB grading from stable to negative. This will impact negatively on returns on interest bearing investments and on property but will lend support to the Rand. It is therefore likely that the Rand will maintain its current position and may be expected to move sideways for the next 12 months.