Asset Manager Q&A

Asset Manager Q&A

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All amounts invested should take account of the individual investor’s circumstances and be diversified across asset classes if possible. For specific investments in equities, investors should always seek professional financial advice before investing.

What stocks would you buy with R5 000?

I would recommend an investment in a balanced unit trust or exchange traded fund, with the latter having delivered 12% – 13% a year over the past decade. For the person keen to make his own stock picks, I would recommend a pick of the following high-momentum shares, after looking at their technical indicators as to the appropriate time to purchase: Mr Price, Exxaro, Kumba, Remgro.

R10 000?

The investor should begin to diversify as much as his capital permits. Emperor Asset Management’s investment philosophy is to create a 50/50 split between high momentum and high income stocks, with the latter including cash holdings.

Apart from the above four core stocks, what we have in our portfolio is: AVI, Aspen Pharmaceuticals, BHP Billiton, Coronation, EOH Holdings, Metair Investments, New Gold, SABMiller, Shoprite, Spar, Foschini, Vodacom, and Woolworths.

R50 000?

The range of stocks would be exactly the same as it would for all the following capital amounts, but the weighting should adjust according to your risk profile. By utilising CFDs we are able to get sufficient market exposure to create capital growth but at the same time our cash portion generates an income portion along with the dividends we receive.

R500 000?

The same split, again focusing on sector distribution as a key risk management policy. Emperor monitors the weekly and monthly market strength index to ensure we are geared appropriately for the anticipated market movement.

R1 million?

The same.

Which stocks/market do you regret not investing in?

My biggest regret is not being invested offshore. Though Emperor’s mandate precludes it for now we are investigating our options.

What stocks/markets are you keeping an eye on?

Our mandate is to invest in the JSE Top 120 stocks, so I am precluded from looking at anything else.

What are your goals when investing?

To create maximum returns with minimal risk. This sounds superficial, yet the reality is that many fund managers actually deliver minimal returns for maximum risk – so it is actually quite radical thinking. The return Emperor has made year-to-date is 30,83% against the Alsi’s 5,57%; over three years it is 102% against the Alsi’s 41,7%; over five years 71,5% against the Alsi’s 13%.

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

We have made 30,2% in Mr Price and 40% in EOH Holdings, both over the past 250 days. Woolworths and Metair have delivered similar returns.

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