Asset Manager Q&A

Asset Manager Q&A

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What stocks would you buy with R5 000
I would invest in a money market fund which would limit capital losses and buffer me against market volatility.

R10 000?
I would invest in an Income Fund which diversifies income within the fixed interest space.

R50 000?
I would invest it in an aggressive income fund which not only provides fixed interest exposure but also property exposure.

R500 000?
I would invest 50% in a local property fund, and the remainder in an offshore property fund. Investing in listed property offers exposure to different sectors of the economy. Currently, local property funds offer income returns (yields) of 7,7% which is higher than bond and cash yields.

Listed property offers growing income whereas cash and bonds do not. The global property fund is yielding about 4%, which is much higher than current fixed income yields including offshore cash yields which offer practically no returns.

R1 million?
I would invest in a balanced fund which has an appropriate mix of equities, cash, property and bonds. I would take on more risk through equity exposure, and balance that with the safer options of cash and bonds. Property is important because it behaves differently from equities (has a low correlation) and is less volatile.

A well-diversified balanced fund will have local and offshore exposure to equities, cash, bonds and property. This acts as a currency hedge and diversifier.

Which stocks/market do you regret not investing in?

The emerging markets property sector took me by surprise. Our global emerging markets property fund is up over 20% in USD year-to-date to June 2012. It’s ahead of our global property fund (developed), Africa fund (including South Africa) and local property fund.

What stocks/markets are you keeping an eye on?

There are opportunities in every market. I am currently doing more work on the Brazilian property market for our global emerging markets property fund. We believe that the Brazilian retail market is undershopped.

What are your goals when investing?

Have a clear investment philosophy and objective. Do thorough fundamental research. And then invest with high conviction and for the long-term. For example, when investing in listed property the primary objective is to get a source of income and then capital growth over time. My goal is to maximise returns without taking untoward risk. Think and plan for the long term.

What was the best investment decision you have made to date?

Consistently investing in and punting listed property to investors when it had been largely ignored by most balanced fund managers. Over the last decade South African listed property shares/units have returned about 982%. This is well ahead of equities (314%), bonds (208%) and cash (135%).

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