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The multi-year outperformance of growth over value stocks is well documented and has been amplified by the Covid-19 pandemic. In fact, cheap (value) stocks have underperformed by the biggest margin seen in over a century.
Just when South Africans thought they’d seen the worst in 2020, the second wave of COVID-19 infections hit. Given this latest resurgence of volatility and uncertainty, local investors are understandably concerned about the state of the market and what they can do to protect themselves.
Last year, the Covid-19 pandemic served up a host of outcomes that surprised even seasoned investment professionals. The speed of the global market recovery, for instance, has been outdone by amateur investors who have managed, so far, to beat the returns earned on the S&P 500 Index.
A sizeable R57 billion flowed into South Africa’s collective investment schemes (CIS) industry in the third quarter of 2020 despite the economic constraints introduced by the COVID-19 pandemic. An update issued by the Association for Savings and Investment South Africa (ASISA) on the 30th of November last year trumpeted “record net inflows” to the industry. A total R165 billion was invested into the more than 1650 portfolios under the association’s purview over the 12 months ending 30 September 2020. Assets under management in the industry topped R2.58 trillion, mostly invested in SA Multi Asset (47%) and SA Interest Bearing (36%) portfolios. The remainder of these assets were invested in SA Equity (16%) and SA Real Estate (1%).
The strongest deterrent against FSP compliance missteps is or should be: