In December 2021, the average prudential balanced portfolio returned 1.8% (November 2021: 1.8%). The top performer is Hangala Prescient Absolute Balanced Fund with 3.3%, while NAM Coronation Balanced Plus Fund with 2.2% takes the bottom spot. For the 3-months Momentum Namibia Growth Plus Fund takes the top position, outperforming the ‘average’ by roughly 1.4%. Allan Gray Balanced Fund underperformed the ‘average’ by 1.8% on the other end of the scale. Note that these returns are before (gross of) asset management fees..

The Monthly Review of Portfolio Performance to 31 December 2021 provides a full review of portfolio performances and other insightful analyses.

Our outlook for investment markets for 2022

The year 2021 produced exceptional returns for pension funds, primarily derived from equities in which funds typically invest between 60% and 65% of their total assets. Graph 6.1 depicts the returns on the various assets classes in which funds invest. The average fund produced a return of around 18%, representing a real return of around 13.5% for 2021. My expectation for 2021 was that the average fund would generate a real return of 5%, or a nominal return of 9.5%, with an inflation rate of 4.5%. My call on equities was wrong. I also cautioned that local bonds yielding between 5% (GC 21) and 13% (GC 50) at the time would only do this if an investor holds them to maturity. Looking at graph 6.1, the return a fund earned on bonds for 2021 would have only been 8.4%, and this is SA bonds. Namibian bonds, in comparison, only yielded 4.4% (IJG ALBI) in nominal terms, which equals zero % in real terms.

The Monthly Review of Portfolio Performance to 31 December 2021 provides a full review of portfolio performances and other insightful analyses.