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