In August 2022, the average prudential balanced portfolio returned 0.0% (July 2022: 2.9%). The top performer is Hangala Prescient Absolute Balanced Fund with 0.6%, while Old Mutual Pinnacle Profile Growth with -1.0% takes the bottom spot. For the 3-months Allan Gray Balanced Fund takes the top spot, outperforming the 'average' by roughly 1.0%. Momentum Namibia Growth Fund underperformed the 'average' by 2.3% 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 August 2022 provides a full review of portfolio performances and other insightful analyses.
Foreign investment – a time to reassess your risk
For local pension fund investors, one probably needs to take a different view of the risks of investing offshore. In the past, developing countries, particularly in Africa, were loaded with a political risk premium. The Cyprus experience has exposed the political risk in developed countries. To quote John Mauldin's assessment of the Cyprus debacle for investors back in 2013 - "Capital controls have shattered the monetary unity of EMU. A Cypriot euro is no longer a core euro…. The complicity of EU authorities in the original plan to violate insured bank savings – halted only by the revolt of the Cypriot parliament – leaves the suspicion that they will steal anybody's money if leaders of the creditor states think it is in their immediate interest to do so. The IMF doesn't get off easy here, either: The IMF's Christine Lagarde has given her blessing to the Troika deal, claiming that the package will restore Cyprus to full health, with public debt below 100pc of GDP by 2020."
John Mauldin's suspicion that "authorities … will steal anybody's money if leaders … think it is in their immediate interest to do so" was justified! The US-lead western sanctions on countries such as North Korea, Iran, Venezuela, and Russia more recently, and the freezing and impounding of their foreign investments, caused severe losses for all who invested in those countries. These countries raised the irk of the US for challenging its dictates, and it can quickly happen to any other country, including SA and Namibia. Namibia already accommodates a Chinese space station in Swakopmund that may double up to guide intercontinental rockets. Imagine what the US will do to Namibia, and Namibian offshore investors should it come to an open conflict with China. It is currently a very realistic scenario! Add huge demographic risks for a more callous view on investment in developed countries. In contrast, the political and demographic risks in Africa are readily comprehensible.
The Monthly Review of Portfolio Performance to 31 August 2022 provides a full review of portfolio performances and other insightful analyses.