The investment environment remains extremely challenging. Despite a challenging year for the equity and bond markets, the Absa Inflation Beater Fund has returned 5.7% over the past year. The Fund returned 7.6% p.a. over the past 5 years, which is 2% above CPI for the 5 year period.

Over the past number of years, worldwide governments and central banks have created a generally positive backdrop for risky assets by means of accommodative monetary policy. There is significant debate at the moment about the effect that a normalization of US interest rates will have on share prices. Although the US will likely further hike interest rates during the next 12 months, global interest rates are not expected to increase rapidly. That said, valuation levels of global markets are on the high side, so our funds are positioned somewhat cautiously, with below average equity weightings.

There are various country-specific risks being faced by South Africa as a result of expected sovereign credit review, trade and budget deficits, poor economic growth and general political uncertainty. The South African equity market is fairly expensive compared to both its own history and other emerging markets. Our equity exposure continues to be focused on stocks that are trading at parity (or at a discount) with the market at large, yet have higher earnings and dividend yields, strong business franchises and balance sheets, and better visibility of cash flows.

In terms of equity exposures, we continue to focus on companies that are trading at parity (or at a discount) with the market at large, yet have higher earnings and dividend yields, strong business franchises and balance sheets, and better visibility of cash flow. The Absa Inflation Beater Fund continues to be positioned so as to minimize the risk of capital loss, whilst targeting a return in excess of inflation, by holding a diversified portfolio of assets including an exposure to equities, though this is limited to 20% of the total fund.

The investment environment remains extremely challenging. Despite a challenging year for the equity and bond markets, the Absa Inflation Beater Fund has returned 5.0% over the past year. The Fund returned 7.5% p.a. over the past 5 years, which is 2.0% above CPI for the 5 year period.

Over the past number of years, worldwide governments and central banks have created a generally positive backdrop for risky assets by means of accommodative monetary policy. There is significant debate at the moment about the effect that a normalization of US interest rates will have on share prices. Although the US will likely further hike interest rates during the next 12 months, global interest rates are not expected to increase rapidly. That said, valuation levels of global markets are on the high side, so our funds are positioned somewhat cautiously, with below average equity weightings.

There are various country-specific risks being faced by South Africa as a result of expected sovereign credit review, trade and budget deficits, poor economic growth and general political uncertainty. The South African equity market is fairly expensive compared to both its own history and other emerging markets. Our equity exposure continues to be focused on stocks that are trading at parity (or at a discount) with the market at large, yet have higher earnings and dividend yields, strong business franchises and balance sheets, and better visibility of cash flows.

In terms of equity exposures, we continue to focus on companies that are trading at parity (or at a discount) with the market at large, yet have higher earnings and dividend yields, strong business franchises and balance sheets, and better visibility of cash flow. The Absa Inflation Beater Fund continues to be positioned so as to minimize the risk of capital loss, whilst targeting a return in excess of inflation, by holding a diversified portfolio of assets including an exposure to equities, though this is limited to 20% of the total fund.

The investment environment remains extremely challenging. Despite a challenging year for the equity and bond markets, the Absa Inflation Beater Fund has returned 4.1% over the past year. The Fund returned 7.6% p.a. over the past 5 years, which is 1.8% above CPI for the 5 year period.

Over the past number of years, worldwide governments and central banks have created a generally positive backdrop for risky assets by means of accommodative monetary policy. There is significant debate at the moment about the effect that a normalisation of US interest rates will have on share prices. Although the US will likely further hike interest rates during the next 12 months, global interest rates are not expected to increase rapidly. That said, valuation levels of global markets are on the high side, so our funds are positioned somewhat cautiously, with below average equity weightings.

Recent economic data from China has generally been below consensus expectations. China has been the main source of new demand for commodities in recent years and softer Chinese export data and the slowdown in Chinese infrastructure spending do remain a headwind for commodities and mining shares and related industries. Currency devaluation has not fully compensated.

There are various country-specific risks being faced by South Africa as a result of an expected sovereign credit review, trade and budget deficits, poor economic growth and general political uncertainty. The South African equity market is fairly expensive compared to both its own history and other emerging markets.

In terms of equity exposures, we continue to focus on companies that are trading at parity (or at a discount) with the market at large, yet have higher earnings and dividend yields, strong business franchises and balance sheets, and better visibility of cash flow. The Absa Inflation Beater Fund continues to be positioned so as to minimise the risk of capital loss, whilst targeting a return in excess of inflation, by holding a diversified portfolio of assets including an exposure to equities, though this is limited to 20% of the total fund.

The investment environment remains extremely challenging. The Absa Inflation Beater Fund has returned 3.7% over the past year. The Fund returned 7.2% p.a. over the past 5 years, which is 1.7% above CPI for the 5 year period.

CPI inflation has been running at 4.8% over the past year, but is likely to accelerate over the next few months because of rising food prices, as well as the lagged effects of a weaker Rand. The Fund has a large holding of inflation linked assets, which would be expected to yield a higher nominal return if inflation rises.

Over the past number of years, worldwide governments and central banks have created a generally positive backdrop for risky assets by means of accommodative monetary policy. There is significant debate at the moment about the effect that a normalization of US interest rates will have on share prices. Although the US will likely further hike interest rates during the next 12 months, global interest rates are not expected to increase rapidly. That said, valuation levels of global markets are on the high side, so our funds are positioned somewhat cautiously, with below average equity weightings.

Recent economic data from China has generally been below consensus expectations. China has been the main source of new demand for commodities in recent years and softer Chinese export data and the slowdown in Chinese infrastructure spending do remain a headwind for commodities and mining shares and related industries. Currency devaluation has not fully compensated.

There are various country-specific risks being faced by South Africa as a result of trade and budget deficits, poor economic growth and general political uncertainty. The South African equity market is fairly expensive compared to both its own history and other emerging markets. Our equity exposure continues to be focused on stocks that are trading at parity (or at a discount) with the market at large, yet have higher earnings and dividend yields, strong business franchises and balance sheets, and better visibility of cash flows.

In terms of equity exposures, we continue to focus on companies that are trading at parity (or at a discount) with the market at large, yet have higher earnings and dividend yields, strong business franchises and balance sheets, and better visibility of cash flow. The Absa Inflation Beater Fund continues to be positioned so as to minimize the risk of capital loss, whilst targeting a return in excess of inflation, by holding a diversified portfolio of assets including an exposure to equities, though this is limited to 20% of the total fund.