Market meltdowns can’t dent long-term wealth build-up – Imara

South Africa’s long-term investors don’t have to worry about financial crises and recession. They can still make handsome returns.

That’s the message from Imara Asset Management South Africa following the publication of seven-year investment statistics showing that those who commit to the long haul can even beat a market meltdown of historic proportions.

The figures come from Morningstar, the investment market watchers who track fund performance over various time periods.

The seven-year numbers cover the impact on the local market of the global financial crisis in 2008 followed in 2009 by local recession.

Over the period from 2008, the Morningstar research shows that Imara’s MET Equity Fund achieved average annualised returns of 16.03%.

The results underline a key investment message, says Dave Eliot, CEO of Imara Asset Management SA and lead manager on the Imara MET Equity Fund.

“Those who invest for the long-term don’t need to worry about day-by-day performance or even months of bad news,” he says. “You can ride out the tough times and still reach your investment goals.

“The key is to work with investment managers who don’t make bets, but behave as though they are part-owners of the companies in which they invest. When you think like an owner, not a trader, you are well acquainted with the managers and the products they produce.

“Good managers with good products make good profits and you stick with them. This increases your opportunity to grow your investment and build real wealth.”

The 16.03% return achieved on average, year after year since 2008, is the second highest seven-year return delivered by any South African fund, according to Morningstar.

The Imara MET Equity Fund is a balanced, benchmark-agnostic fund. This means it does not need to buy and sell positions to ensure alignment with any specific index.

Its annualised five-year return was 20.40% while the annual average over three years was 20.83%.

“The three- and five-year numbers may be higher,” says Eliot, “but it is more instructive to view the seven-year picture as we can then factor in the jolt taken in 2008 and 2009 when the JSE and the local economy were impacted by one of the worst crises in living memory.

“Some investors are feeling nervous at the moment and we’ve seen the JSE weaken. The good news is that if you commit to a long-term strategy and have a relationship with fund managers who do the same, you are well placed to survive the bumps along the road and still build your personal wealth.”