Asset markets performed strongly during the fourth quarter of 2021. The FTSE/JSE All Share Index witnessed a total return of 15.1% for the quarter - this brings the total return for 2021 to a very attractive 29.2%. It is of interest to note that the FTSE/JSE Value Index recorded a total return of 39.3% for the year compared to 18.3% for the FTSE/JSE Growth Index. Property staged an impressive recovery with a total return of 36.9% and 8.3% for the quarter. Bonds delivered a respectable 2.9% for the quarter with 8.4% for the year. Cash delivered a tepid 3.8% for the year.

Looking at 2022, investors have several issues to digest. Inflation has trended higher in much of the world amid a transitory narrative. The Federal Reserve took steps in December to hasten the removal of their balance sheet stimulus programme and markets have started to embed a more aggressive rate-hike regime amid economic growth that will be slower than that experienced in 2021. The COVID-19 pandemic will still be with us during 2022 and variants, such as the Omicron variant, will undoubtedly add to uncertainty in markets which appear somewhat stretched. South African investors will be wary of developments in China and mindful of the potential risks from property emanating from the likes of Evergrande, for example, while also bearing slowing local growth and enduring concerns about fiscal risks. We have adopted a cautious approach to markets in our portfolios in line with our mandates requiring capital preservation.