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Greece: Deal or no deal?

24 February 2015 | General

It is with a real sense of déjà vu that the term “Grexit” meaning a Greek exit from the eurozone is being discussed. Back in 2011 and 2012, it was the centre of market attention until a series of bailouts and the promised intervention of the European Central Bank (ECB) diffused the crisis, not only for Greece, but also for Ireland, Portugal, Spain and Italy. But only the crisis on financial markets was resolved. The Greek economy has been in a depression for many years with the real value of economic activity some 25% lower today than in 2008. This is in part because of the state being forced to run sustained large budget surpluses as part of its bailout obligations. In other words, the state is taking more out of the economy through taxes than it is putting back through spending. The required surpluses have almost no precedent in history. As the economy has shrunk, the debt-to-GDP ratio has increased, rather than fallen.

Risk factor investing: The evolution of Multi-Asset Strategies

24 February 2015 | General

Multi-asset portfolios have attracted interest around the world in recent years as investors have sought new ways to try to capture equity-like returns with less volatility. Many of these approaches have focused on traditional asset allocation methods such as shifting between stocks, bonds and cash. However, Toby Hayes, vice president and portfolio manager, Franklin Templeton Solutions, is using a different strategy, one that makes use of a larger toolkit to seek out value based on diversifying the risk factors, not the asset class.

Watch for risk hidden in offshore returns, warns RECM

24 February 2015 | General

The significant weakening of the rand against major currencies over the past three years has been a big driver of returns for South African investors invested offshore, and may even have masked poor investment allocation. Now that the rand is close to fair value, if not slightly undervalued, the performance of the underlying offshore assets will be far more important for future returns. Further, with international markets now looking expensive, offshore exposure should be carefully managed.

Investing overseas: capital preservation in uncertain times

23 February 2015 | General

Two esteemed US Economics Professors, Maurice Obstfeld and Kenneth Rogoff called it one of the six great puzzles in macroeconomics: “home bias”. Why do investors keep so much of their portfolios in domestic assets? We look at how this approach can make investors vulnerable in times of crisis and consider how investing overseas can mitigate this risk.

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The strongest deterrent against FSP compliance missteps is or should be:

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A criminal conviction Debarment Fine or penalty Any of the above can work

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