In March 2018 the average prudential balanced portfolio returned minus -1.67% (February 2018: 0.79%). Top performer is Investment Solutions (-0.74%); while Prudential (-2.35%) takes the bottom spot. For the 3 month period, Investment Solutions again takes top spot, outperforming the ‘average’ by roughly 1.68%. On the other end of the scale EMH underperformed the ‘average’ by -1.70%.

Do investors care about governance when there is money to be made?

Doing business presents risks as being alive and the adage that taking greater risks will deliver greater returns will always remain true. Somewhere there is a tipping point where the risk was just too high and resulted in the demise of the venture. When is a risk a normal business risk and when does it become morally questionable – whose morals do we apply as the measure anyway? And where is the boundary between business and politics? I do not believe there is a boundary between these two. Politics is but another arrow in the quiver of business while war is the ultimate argument of politics on behalf of business. Take US politics. Without business involvement, a candidate would get nowhere. So business interests are eventually dictating to politics what its interests are. US global hegemony is absolutely essential for US business interests to achieve their goals and to dominate the global economy. We are all experiencing in our own lives how we have to dance to the tune of the US be it when you want to open a bank account, when you want to enter into a business relationship with a North Korean company, or you want to consider a request by the Chinese government to set up an earth satellite tracking station near Swakopmund or to construct a naval base in Walvis Bay. What is morally wrong with this? The problem is that should the Chinese get a foothold in Namibia they might be able to challenge the US military dominance and consequently the global dominance of US business interests.

One can only conclude that there is ultimately no such thing as moral values when it comes to human interaction. The United Nations was established through US initiative on the noble ticket of promoting peaceful coexistence of nations across the globe. Yet how many times has the US enlisted so-called coalitions of the willing to enforce its interests as dictated by business without UN mandate and did these interventions make the world any better? It’s not that the US would need Denmark or Britain or France or Australia to make its point but it is merely trying to give its brute endeavours a moral coating. The first things one hears in the media after the recent attack on Syria how the ‘west’ can now get its foot in the door with the reconstruction of Syria. The ‘west’ of course being the US first and foremost, with some spoils left to the ‘willing’.

It seems to me a bit of a farce and an exercise in futility of the weak, applying ESG principles when the ultimate argument is brutal force.

So what does this have to do with investors and their investments you may ask?

Read part 6 of the Monthly Review of Portfolio Performance to 31 March 2018 to find out what our investment views are.