Category Investments

Excellence in fund management helps to grow REZCO's assets under management

02 May 2014 Brian du Plessis, REZCO

In this uncertain economic environment, asset allocation and investment philosophy are critical factors in obtaining consistent fund performance. This is according to Brian du Plessis of REZCO Asset Management’s Retail Distribution division, who says, “At REZCO Asset Management we accept the responsibility of following an active asset allocation management style. We believe that asset allocation is a fundamental way to preserve capital during times of uncertainty in the market and to create wealth for our clients when opportunities present themselves.

"That said, we feel it is also important to adopt somewhat of a defensive strategy during times of market uncertainty. Good asset allocators know how to play both offense and defence on their clients’ behalf. By allocating a larger portion of a portfolio to cash, you are essentially able to win by not losing. To quote investment guru Warren Buffet: ‘Only once the tide has gone out, do you realise who has been swimming naked’.”
As a smaller fund manager, REZCO Asset Management had an excellent year in 2013, experiencing an increase of 300% in assets under management. Du Plessis attributes this to the company consistently pursuing its investment philosophy of obtaining risk-adjusted returns for its clients and effectively managing the downside risk through various market cycles.
Du Plessis says it is important for investors to observe how a fund manager has performed through various market cycles and whether they have been able to participate actively in bull markets, while at the same time managing the downside associated with a bear market.
"Our investment philosophy at REZCO Asset Management is centred on earning risk-adjusted returns for our investors. It is therefore essential that we invest in shares that offer both value and growth. We continually ask ourselves: ‘How much are we essentially paying for growth and are we buying growth at the right price?’ We believe it is important that managers invest with conviction and that they are not influenced by the holdings in a particular benchmark.”
On the issue of local shares versus offshore equities, Du Plessis clarifies, "We feel that foreign shares continue to offer better value than local shares. The local equity market continues to reach all-time highs, which are often fuelled by headlines as opposed to fundamentals. As a result, local equity values continue to be stretched, which increases the probability of a market correction and the exposure of investors to downside risk.”
Du Plessis says it is important for investors to realise that the bull market has been running for over five years now and that "The bull is starting to grow old. That being said, however, there are still pockets of opportunity in the local market at which growth can be bought at the right price.
"It is therefore essential that investors adopt a long-term view when investing their capital and that you entrust your capital to a manager with a long-term track record of preserving clients’ capital and creating wealth through various market cycles. This will continue to emphasise the importance of the consistent pursuit of our investment philosophy going forward,” he concludes.

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