TRANSCRIPT

Hi everyone, my name is Richo Venter. Welcome to the monthly DFM bulletin.

After a challenging 2022, January was a good month for investors with positive sentiments spreading across markets as inflationary fears declined and China lifted its hard lockdown restrictions.

If you look at the major asset class performance in January, global equities took charge and produced 9.6% in Rand. SA Equity also had a good month and is now up 14% over the last three months. Pleasingly, our positive view on local bonds also materialised over the last three months, with the SA All Bond Index rallying 7.6%. Local property was the only major asset loss that struggled during the month.

The positive asset class returns resulted in a great month for the range with all five portfolios delivering strong returns in absolute terms and relative to peers. The Flexible Income Portfolio returned 1.4% for the month, which was promising considering the solution’s low risk construct.

Amplify’s SCI Strategic Income Fund, managed by Terrapin Capital, was the top performer. We have high conviction that 2023 will continue to be a good year for this portfolio.

The Flexible Growth portfolio was the best performer within the range, with its high exposure to both local and global equities boasting 7.5% overall. Within this portfolio, the Coronation Global Optimum Growth Feeder Fund was the top performing fund.

Apart from the running global funds in the Flexible Growth Portfolio, there were quite a few other notable performers amongst the underlying managers utilised across the range. Amongst the multi asset managers, Fairtree had a phenomenal run, helped by the Chinese exposure and overweight positions in gold companies. While Coronation and Lauriuam also delivered. Overweight exposures to shares linked directly or indirectly to China was one of the main contributors for these outperforming asset managers.

In terms of outlook, we remain positive for the rest of the year due to multiple reasons. Firstly, although some countries are expected to enter recessions this year, the IMF is predicting the world will still grow at almost 3% above inflation in 2023, with emerging and developing economies taking charge. Energy prices have also eased, and inflation is expected to continue its trend lower. The year’s consumers disposable income remains resilient, suggesting a severe recession in the US is not likely. China’s recovery is expected to continue, which is good for commodities, and the South African economy. Lastly, our managers currently see an abundance of opportunities emerging in the oversold UK and European markets.

Overall, there is no shortage of ideas for our managers to generate alpha.

Thanks for watching this month’s Bulletin, and thank you for your support.

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