Blue Chip Journal - June 2019 edition

On the money
Making waves this quarter
Impactful sessions with fund managers
“Meet the Managers” adopting a new format
The Collaborative
Exchange will be
running a series of
“masterclass” conferences
throughout
South Africa in July
2019 where 29 local
and international
fund managers will be
present.
The format is an
impactful way for
financial advisors to
see eight of their chosen fund managers within the space of one
day and earn CPD points for doing so. Meet the Managers is now
in its third year of existence and has been attended by about 1300
financial advisors last year at sessions in Johannesburg, Cape Town
and Durban.
Kevin Hinton, a Director of The Collaborative Exchange, says,
“Meet the Managers provides an insightful platform for financial
advisors who want to keep abreast of financial markets and the
funds that they have invested their clients’ assets with.”
Both large and emerging investment managers participate as
well as domestic and international fund managers. So, advisors can
ensure that they also get the opportunity to see new firms that are
emerging. Hinton says, “We do this in an impactful way in ensuring
that the sessions are small and intimate, and advisors can get 'up
close and personal' with fund managers. It is widely accepted that
the TED talk format is impactful, with short, concise and powerful
sessions generally not longer than 18 minutes.”
Marc du Plooy, the Managing Director of Wealth Associates and
Chairperson of the Financial Intermediaries Association says, “You
know what I like about 'Meet the Managers'? It is that you actually
meet the managers! What better way to round out your perspective
of economics, volatility, asset classes, portfolio construction than
by listening to and engaging with a number of top-class managers
in a series of intensive personal interactions. It allows you to really
test your own understanding in the construct of your portfolios for
your clients. Even if you are not currently using all those managers,
it is incredibly valuable and insightful to listen to the views of other
top-class industry professionals. It can only make you a better
investment professional.”
Not your ordinary balanced fund
Protecting capital, growing wealth
In a crowded and competitive market of 533 Balanced CIS Funds,
representing R806-billion according to latest ASISA stats, how does
one choose where to invest your hard-earned retirement savings?
Clearly support for the “big four” high-equity balanced funds from
the larger houses has been popular, given that they constitute 40%
of the R806-billion in this category, and advisors have done well to
select these funds for their clients, but often fall short when it comes
to considering the correlation of the funds that they have chosen. Due
to their significant size and the limited investment universe in South
Africa, they are highly correlated. Advisors should consider mixing
funds from boutique managers, to enhance the diversification and
hence the risk-adjusted return profile for their clients.
The perception that funds from boutique managers are riskier
is a broad misconception. The graph below shows the drawdown
of the Laurium Balanced Prescient Fund versus the largest highequity
funds in the SA high-equity MA category. Clients invested
in balanced funds are as concerned about protecting capital on
the downside, as they are about growing their wealth in real terms.
Drawdown
Time Period: 2016/01/01 to 2019/05/31
0.0
-1.0
-2.0
-3.0
-4.0
-5.0
-6.0
-7.0
-8.0
-9.0
-10.0
-11.0
-12.0
Laurium Balanced Fund
Manager C
Source: Morningstar Direct
2016/05 2016/11 2017/05 2017/11 2018/05 2018/11 2019/05
(ASISA) South African MA High Equity
Manager D
Manager A
Manager B
Drawdown vs Largest Balanced Funds (since inception 9 December
2016 to 30 April 2019)
As you search for investment managers who have the potential to
deliver real returns and alpha above their benchmarks, be sure to
consider boutiques in your portfolio.
Financial advisors that want to attend Meet the Managers should email
info@meetthemanagers.co.za or visit www.meetthemanagers.co.za