In November 2022, the average prudential balanced portfolio returned 3.0% (October 2022: 4.4%). The top performer is Ninety-One Managed Fund with 4.2%, while Hangala Prescient Absolute Balanced Fund with 1.0% takes the bottom spot. For the 3-months Ninety-One Managed Fund takes the top spot, outperforming the 'average' by roughly 1.9%. Hangala Prescient Absolute Balanced Fund underperformed the 'average' by 3.4% 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 30 November 2022  provides a full review of portfolio performances and other insightful analyses. 

A decade of roller coaster markets

I listened to a very interesting interview with Felix Zulauf by Ed D’Agostino of Mauldin Economic on 9 December 2022. Felix Zulauf was the global strategist for UBS Bank and was the head of its institutional portfolio management group. He founded Zulauf Asset Management and manages Zulauf Consulting, where he consults to some of the world’s largest and most influential institutional investors.

Because the views of Felix Zulauf mirror my views of financial markets and how they will be impacted by global political developments, I will focus on this interview in this column. He, of course, has a much deeper insight and understanding of the subject and throws some light on questions I could not answer for myself…

Zulauf expects a mild recession in the US and very serious recessions in Europe, the UK, and the worst in China. The US recession will not be as severe as that in Europe and the UK as the US is virtually energy independent, unlike the others. The lockdowns are suspected to be a camouflage of China’s recession. As a result, China will not be the locomotive for the world economy as it was for the past 15 years. However, even under these circumstances, there will be individual companies doing well, such as defence contractors and energy companies.

For the investor, the essence of the economic environment is that we will go through a decade of roller coaster markets, with ups and downs like probably a whole generation has never experienced before. Under these circumstances, a passive strategy will produce disappointing returns, and one may even lose in real terms. The investor must make important decisions on buying and holding for a certain period and to sell to be liquid and preserve capital for buying again later on or going short on a declining market.

The Monthly Review of Portfolio Performance to 30 November 2022 also reflects the editor’s views on current developments and their impact on investment markets.