Quarterly Commentary

It was another good quarter for global risk assets as improving corporate earnings and economic data continued to point to a healthy global economy. Despite the brief periods of increased volatility caused by the geopolitical tension between the US and North Korea and the devastating destruction caused by Hurricane Harvey and Irma, the market focused on the longer-term economic fundamentals to continue supporting risk assets. Global equity markets returned 5.3% in US dollars over the quarter, while emerging markets, which continue to get support from a weaker US dollar, increased by 8% in US dollars.

In line with emerging markets, South Africa had a strong start to the quarter, with the JSE All Share Index increasing by 9.9% in rand terms during the first two months (July and August). A slightly tempered appetite toward emerging markets, as well as rising political tension weighed on the market in September, with the JSE All-share Index giving back some of the gains to end the quarter up 8.9%. This global risk-on appetite was supportive for all local asset classes as local property (+5.7%) and local bonds (+3.7%) both outperformed cash (+1.8%) over the quarter.

The Ginsburg SCI Worldwide Flexible Fund was launched on the 3rd July 2017 and reached a meaningful allocation to the underlying investments as of 1st of August 2017.

The Fund generated a return of +2.6% from 1st August to the end of September 2017, slightly underperforming the ASISA Worldwide Multi-Asset Flexible peer group (+2.7%) and the strategic benchmark (+3.2%).

Despite macroeconomic fundamentals remaining favourable for risk assets, we remain cognisant of the risks that could impact the current prolonged bull market. The consequences of the quantitative "tightening" process currently being led by the US, and the impact of this withdrawal of liquidity from the global financial system, are yet to be determined over both the short and long term.

Political risk also remains a key factor both locally and abroad as upcoming elections and policy decisions could potentially sway asset prices and currencies in either direction.

The Fund’s complementary blend of active managers provides the necessary diversified global exposure to generate long-term value for our clients within this opaque investment environment.

The portfolio will aim to maximize total return for investors by way of a flexible worldwide portfolio actively investing across different classes, both locally and internationally.