The no taper decision by the Fed triggered a rally in both bond and equity markets in September. Developed equity markets rose by 2.5% and emerging markets by 4.0%. The JSE followed suit, up 5.1% driven by a 6.2% and 6.3% rise in industrial and financial shares respectively.

Local bond yields declined from 8.63% to 7.97% as US bonds rallied down to 2.63% from 2.94%. In response, our property stocks rose by 6.7%. Our fixed interest managers, have kept their modified duration low in order to minimise the risk of capital loss, given the possibility of QE tapering .Our managers are achieving yields in excess of 6.5%, beating cash.

There have been no significant changes to our top ten holdings. We have maintained our exposure to the Allan Gray Stable fund for now, as this is a way to hedge against any downside equity market risk. Given the attractive opportunities in overseas equities, we are at our maximum 25% offshore exposure across all our funds on a look- through basis.