2018-09 Seed Market Overview

The Monetary Policy Committee met on 20 September to discuss interest rates. The main points discussed included the oil price increases and the weakening rand. The final decision was a close call, but ultimately the verdict was to keep the repo rate unchanged at 6.5% (4 votes) rather than to increase it by 0.25% (3 votes). The SARB did mention that they will continue to be vigilant, as the inflation outlook has deteriorated since their previous meeting in July. A rate increase at this time would have dealt yet another blow to the struggling SA economy. Graph 1 (below) illustrates the repo rate over time.

Seed Weekly – 2018 – Final Countdown

While we are comfortably settled into the month of October it is of no surprise that shopping malls have already started displaying their Christmas decorations and the talk around company water coolers is leaning towards conversations of, “So what are your December plans, Jim?”

Seed Weekly – When Times Are Tough, Stay Invested

Since the global financial crisis, local investors have been spoilt with good market returns as excess liquidity was pumped into the system in the developed markets in an attempt to resuscitate their economies. South Africa, like other emerging markets, was a key beneficiary of this capital, which helped to push asset prices up.

Latest Seed Prescient Fund MDDs

Seed Global Fund A MDD

The Fund aims to generate a return of Libor + 3% pa over rolling 5 year periods and avoid negative returns over any 3 year period.

Seed Income Prescient Fund A1 MDD

The Fund aims to generate STEFI Call + 1% pa over rolling 1 year periods and avoid negative returns over any 6 month period.

Seed Balanced Prescient Fund A1 MDD

The Fund aims to generate CPI + 6% pa over rolling 5 year periods and avoid negative returns over any 3 year period.

Seed Stable Prescient Fund A1 MDD

The Fund aims to generate CPI + 4% pa over rolling 3 year periods and avoid negative returns over any 1 year period.

Seed Weekly – Tolerating Your Risk Tolerance

Over the course of the past few months, I’ve been occupied with the challenge of allocating new capital to an investment portfolio. By the way, I don’t think there’s an easy solution to this problem. The more I think about it, the more I grapple with the definition of risk tolerance, as this is key to finding the right answer.

2018-08 Seed Market Overview

Unfortunately, it is not getting much easier for the South African economy. The rand extended its drop in August with the ongoing economic crisis in Turkey causing investors to withdraw from emerging market currencies and assets. The Turkish lira collapse spilled over to most emerging market currencies forcing investors to find shelter in safer currencies such as the USD.