South African (ZAR) Solution Rebalance
SA (ZAR) Solution Rebalance | NOVEMBER 2024
Introduction
In April, in line with our strategic investment approach, we realigned our portfolios to their target allocations. This involved reducing our holdings in global equities, which had appreciated significantly, and increasing our exposure to undervalued local assets (equities and bonds). This was part of our ongoing commitment to maintain the integrity of our strategic asset allocations amidst fluctuating market conditions, notwithstanding the uncertainties surrounding local elections and the broader South African economic environment.
Current Context
Since then, performance dynamics have shifted. Local assets have benefited from improved post-election sentiment and favourable external conditions, outperforming expectations. Conversely, global assets have not fared as well, partly due to a strengthening rand. Given these developments, we find ourselves in a position to again realign our portfolios by taking profits from the now over-performing local assets and reinvesting in global equities and bonds, which are currently underweighted according to our strategic asset allocation plans.
Asset Allocation Adjustments
The forthcoming trades aim to restore our portfolios to their target strategic weights. Below is a visual outline of the expected adjustments:
Like our previous adjustments, these changes are not speculative but are a deliberate effort to capitalize on the market’s natural movements and ensure our portfolios reflect our long-term strategic views. This disciplined approach helps safeguard against market volatility and enhances potential returns over time.
TIMING
The rebalance is scheduled to occur between November 11th and November 15th, 2024. During the rebalance period, which typically spans 1 to 2 days:
Withdrawals will be temporarily paused; and
While changes can still be instructed via WealthExplorer™, they may be processed post-rebalance depending on when instructions are submitted.
Conclusion
These adjustments are carefully considered to balance market risks with the opportunities available, aiming to deliver consistent, inflation-beating returns over time. Should you have any questions or require any further information please get in touch.
Sending love
Richard and the F&A team
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