In December 2020 the average prudential balanced portfolio returned 1.9% (November 2020: 5.7%). Top performer is Hangala Prescient Absolute Balanced Fund with 3.6%, while Allan Gray Balanced Fund with 0.6% takes the bottom spot. For the 3-month period, NAM Coronation Balanced Plus Fund takes the top spot, outperforming the ‘average’ by roughly 3.4%. On the other end of the scale Stanlib Managed Fund underperformed the ‘average’ by 2.0%. Note that these returns are before (gross of) asset management fees.

The Monthly Review of Portfolio Performance to 31 December 2020 provides a full review of portfolio performances and other interesting analyses.

The 2020s are going to be about rifle shots, not the shotgun approach of index funds!

In his newsletter ‘Thoughts from the Frontline’ of 23 January 2021, John Mauldin presents a number of US market metrics that should make an investor think.

Consider the so-called ‘Buffet Indicator’ as per graph 6.1 (Source: Adviser Perspectives), that measures US equities as a percentage of nominal US GDP. It is at an all-time high and about as far above the ‘Exponential Regression’ line as it was at the end of 2000 when the S&P 500 dropped from its peak of 1,518 at the end of July 2000 to 815 by end of August 2002. That was a drop of 87%! It took the S&P 500 5 years to get back to the July 2000 level, i.e. by 2007, only to drop back to 735 at the end of January 2009 through the global financial crisis. That was a drop of 108% from the peak it reached at the end of April 2007. As we speak, the S&P 500 is testing the 4,000 level, evidently driven by quantitative easing that we have referred to repeatedly in earlier newsletters.

Graph 6.1

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The Monthly Review of Portfolio Performance to 31 December 2020 provides a full review of portfolio performances and other interesting analyses.