Tracking Targets
Monthly Update | March 2021
I hope all of you had a lovely and peaceful Easter break. We managed to take some time out with some good friends in the central berg, relaxing and enjoying one of KZN’s real gems! Between the beaches, the Midlands, and the Drakensberg, we really are spoilt for choice down here.
Following the markets bottoming a year ago, circa 23 March 2020, many of us were deeply unsettled. Happily, the recovery has been superb, with double digit returns on all portfolios up to 31 March 2021. These are some snippets:
Our local solution set posted as high* as a 46.1% 1-year recovery number.
Our offshore GBP & USD solution set managed as high* as 38.4% and 53.7% respectively for the same period.
* These data points are from our most aggressive portfolios. Safer, more conservative portfolios are engineered to not pull back as much and as such, enjoy marginally less upside.
Now while we are not overly interested in the short-term data. It does not make it unimportant. The recovery is meaningful and importantly allows our long-term strategies to continue to track their targets correctly.
More detail from Liam Dawson, below. Enjoy!
March 2021 Update
This month's piece is compiled by Liam Dawson, Investment Analyst - PortfolioMetrix.
Local Update
South African Equity has continued its good run of form, posting a decent 3.5% return over the month of March. Interestingly the local equity market was largely driven by the more domestically focused and smaller market cap constituents. Following in this theme SA Listed Property provided another good month of returns (1.2%), however the threat of a “third wave” and delayed roll-out of a vaccination program looms large.
Despite uncertainty both in South Africa and abroad the rand held its own against a strengthening US dollar, ending the month at R14.78/$ (2.3% stronger). Government bonds were not so lucky however as the benchmark 10-year yield moved from 9% to 9.5%, in line with rising global yields. South African fixed income continues to provide exceptionally attractive yields to both local and global investors in a low inflation environment.
Global Update
March was a positive month for most equity markets as investors factored in a continuation of global economic recovery which is expected to be turbocharged by the passing of Joe Biden’s $1.9 trillion stimulus package. This was particularly evident in sectors and economies which had suffered more from Coronavirus, for example cheaper ‘value’ companies (a theme that began in November last year with the announcement of successful vaccine trials and has continued this quarter). The prospects of economic recovery, and higher inflation also caused global bond yields to continue rising.