In June 2023, the average prudential balanced portfolio returned 2.4% (May 2023: 0.7%). The top performer is Hangala Absolute Capital Balanced Fund with 3.8%, while Investment Solutions Balanced Growth Fund with 1.3% takes the bottom spot. For the three months, NAM Coronation Balanced Plus Fund takes the top spot, outperforming the 'average' by roughly 1.5%. NinetyOne Managed Fund underperformed the 'average' by 1.9% 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 June 2023 also reflects the editor’s views on current developments and their impact on investment markets.

Tread carefully, but the point of inflection is nearing!

It is improbable that the man on the street who dares to choose between the three main asset classes would have been as successful as the prudential balanced portfolio manager. However, prudential portfolio managers invest for the long term. Their decisions are based on experience heavily weighted by market behaviour over the past 70 years and assuming that markets will revert to normal following any prospective catastrophe. They might tweak their portfolios but will not make radical changes as it might become a self-fulfilling prophecy.

An individual investor should consider two factors that are not important to the prudential balanced portfolio manager. Firstly, what is long-term for a portfolio manager may not be long-term for an individual investor. The investment horizon of many investors can be substantially shorter, and they should consider any prospective catastrophe. Secondly, the individual investor must consider substantial irregular cash flows, where timing is crucial. Not investing when the market peaks or withdrawing investments when it troughs is common sense. But how does one know when it peaked or bottomed? Going by history provides pointers but no certainty on whereto the market will move. Spreading large cash flows over a period (Nam Dollar-cost averaging) will reduce the risk of getting the timing wrong.

The Ukraine conflict constitutes a prospective catastrophe for the world and investors…

The Monthly Review of Portfolio Performance to 30 June 2023 also reflects the editor’s views on current developments and their impact on investment markets.