Blue Chip Journal Issue 76

COVER FEATURE
place a greater emphasis on asset managers with specialist skills
and a greater focus on quality factors in both the equity and fixed
income space. We constantly monitor and evaluate decisions taken
and ensure that every manager is delivering on their appointed
strategy and mandate.
How does the global economic effect of Covid-19 affect
offshore investments? The effect of the pandemic also affects
retirement savings that are invested offshore. How so? What
do you advise people in this predicament? Although we follow
the same process locally and internationally, we do rely heavily
on our international team based in London to guide us on the
international market as they are a lot closer to it than we are. For
the offshore portion of local portfolios, we believe that the biggest
detractor of performance has been fees. In model portfolios,
the costs of feeder funds and performance fees often result in
underperformance. We prefer to execute using mainly passive
or smart-beta strategies. For hard currency solutions, we would
once again prefer to use specialist managers in each asset class
and can execute through active, passive and alternative strategies
depending on their appropriateness in each portfolio.
To what extent have advisors who have had a DFM during the
pandemic benefitted? I think the biggest benefit is probably the
ability for us to implement any decisions simultaneously across
all the portfolios. Our Category II licence allows our discretion to
make changes to both the underlying asset classes and funds. All
our clients benefit from this advantage at the same time.
What is the silver lining, if any, in what has happened to
investment markets? Markets that were overvalued have come
off. The sell-off in March presented this opportunity for our clients
Improved
communication
is key during
these times of
increased volatility.
who were waiting for the correct time to
get into the market. We saw large flows of
assets transitioning into model portfolios
as the capital gains tax (CGT) effect of
switching out of other assets reduced.
Please give a message of motivation
with regards to financial investments
during this Covid-19 term. Markets go
through cycles and if your investment is
worth less now than a few months ago,
remember that you have not lost money
until you disinvest and lock in those losses.
Patience and discipline in your investment
goals result in success. If the lockdown has
prompted you to save money on items
that you usually spend on (eg fuel, beauty
treatments, etc) invest this now, so you can
build a bigger reserve. If you are forced to
supplement your income, start by selling
assets that you don’t need or use. Then only
start using savings. Use this opportunity to revise your budget
and to find ways to be disciplined in saving again, once your
circumstances change.
Momentum’s brand proposition is: “Keep your clients focused
on their goals, even as the world around us changes”. How
has MIC helped advisors in keeping their clients focused on
their goals? The MIC team has increased our interactions with
advisors. We have been writing a lot more articles (literally every
week) explaining the effect of movements in local and offshore
assets on their portfolios.
As an investment team, we have also increased the frequency
of our interaction with asset managers and clients alike. Improved
communication is key during times of increased volatility. We have
implemented changes this quarter by increasing our exposure to
the quality strategy and reduced our vulnerability to funds with
high exposure to credit and listed property – an area that we
believe the risks of defaults has increased.
As August is Women’s Month, what advice do you give to
women in the finance industry? Our deputy CEO, Jeanette
Marais, always says that “A man is not a plan”. I’d like to expand
on this by saying that you shouldn’t rely on anyone else to have
your best interests at heart. Make sure that you start saving early,
continue to save and have sufficient money for life’s surprises.
For women entering the financial industry, you have the
opportunity to contribute and shape it in the same way that your
male counterparts have done. Join an employer who offers equal
opportunities, the flexibility to continue working when you decide
to have children and the ability to add value throughout your
working career. And then give back by being an inspiration and
mentor to younger women.
20 www.bluechipdigital.co.za