In July 2019 the average prudential balanced portfolio returned -0.7% (June 2019: 1.7%). Top performer is Allan Gray Balanced Fund with 0.1%, while Momentum Namibia Growth Fund with -1.6% takes the bottom spot. For the 3-month period, Investment Solutions Balanced Fund takes top spot, outperforming the ‘average’ by roughly 1.2%. On the other end of the scale Allan Gray Balanced Fund underperformed the ‘average’ by 1.8%. Note that these returns are before asset management fee.

When is a good time to switch to another investment manager?

Retirement fund members who have become used to Allan Gray ‘shooting the lights out’ often can no longer bear with its performance lingering right at the bottom or close to the bottom of the performance ranking tables of prudential balanced managers, for periods up to 5 years as depicted in graphs 1.2 to 1.7 in our review. For the month of July Allan Gray managed to rise to the top, given that it is a very short period and bears no relevance.

As the result, clients more and more often contemplate or even decide to move their investments away from Allan Gray to another manager. The questions are - is it a good time to move away from Allan Gray and when is a good time to move away from your trusted manager?

I guess when we talk about buying or selling a house, there will be little argument about not selling when the market is at the bottom and not buying when the market is at the top. This is a sensible principle that one should apply to one’s investments and investment manager as well. The difficulty however is to know when any asset has reached the bottom or the top.

Read part 6 of the Monthly Review of Portfolio Performance to 31 July 2019 to find out what our investment views are.