In August the average prudential balanced portfolio returned 0.85% (July: 3.55%). Top performer is Stanlib (1.50%); while Allan Gray (0.23%) takes the bottom spot. For the 3 month period, EMH takes top spot, outperforming the ‘average’ by roughly 1.10%. On the other end of the scale Allan Gray underperformed the ‘average’ by 0.93%.

Interest rates are on the way up – tighten your belt and reduce your return expectations!

Since the US Fed has now spelled out the way forward we expect volatility in global financial markets to decline and we expect low real returns on pension portfolios over the next couple of years. We see no opportunity to leverage returns for a better outcome. What is left to us to do, is to reduce one’s return expectations, reduce one’s draw-down rate if one is already in that phase of one’s life and tighten one’s belt.

Read part 6 of the Monthly Review of Portfolio Performance to 31 August 2017 to find out what our investment views are.