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May 2022

After experiencing a downward trend for most of the month of May, and reaching intra-month drawdowns of between 4.5% and 6%, both local and global markets posted a relatively strong rally in the last few days of the month to offset the majority of losses. This rally was driven by some upbeat corporate results and earnings, expectations around peaking inflation figures, and Chinese stimulus being rolled out to offset recent lockdowns.

It was a tough month for investors, with little place to hide, as most asset classes delivered either negative or very muted returns amid continued uncertainty driven by the conflict in Ukraine, rising inflation, and the potential for more aggressive monetary responses. Despite headlines focussing primarily on the w ar in Ukraine, we continue to see a normalisation of monetary policy around the world, with 23 central banks raising interest rates during March, including South Africa (SA) and the United States (US)

Flexible income funds can invest in various income-generating instruments, such as bonds, property, and global, to enhance the yield above money market rates. The ongoing Russia-Ukraine crisis resulted in negative market sentiment and higher inflation expectations, which have had a negative impact on these asset classes.

Investors typically either reduce their equity exposure too soon when the markets are going up, or sell their exposure when the markets are going down because they fear that the equity market will continue its downtrend. Research suggests that the best approach to investing is to remain invested unless a recession is imminent. Missing even only a few good trading days in the market can have a significant impact on a portfolio over the long term. It is impossible to know when the good trading days will take place. Therefore, it is more prudent to remain invested throughout the market cycle.

It was a tough start to the year in January, for offshore markets in particular. Rising geopolitical tensions between the United States (US) and Russia, a more hawkish Federal Reserve (Fed), continued inflationary pressures, and a price drop of more than 20% in a single day for Netflix and Meta (the parent company of Facebook) all contributed to a rollercoaster ride in the markets that, for the most part, ended in significant losses. The main culprits were developed market equities, specifically growth shares, that sold off through the month and underperformed emerging markets. While gold prices fell amidst rising interest rate fears, some positive indicators out of China boosted most commodity prices. Furthermore, tensions around Russia, one of the primary global oil producers, drove oil prices significantly higher, benefitting energy stocks around the world.

Markets were driven by similar themes as in September, namely the expectation of tapering and interest rate hikes on the back of rising inflation, Chinese growth and debt concerns, and a prevailing energy crisis. Locally, load shedding returned, significantly dampening local sentiment as South Africans headed to the polls for the municipal elections. Despite these uncertainties, and the accompanying volatility, it was a relatively strong start to the last quarter of 2021, with various global equity indices, once again, hovering close to all-time highs, thanks to another strong earnings season and a strong rebound in the local equity market during October on the back of resource counters.

September, 2021

September was a relatively volatile month across many markets, as investors continue to digest and to react to the spread of the Delta variant, the timeline for the reduction in stimulus, continued inflation concerns, an energy crunch, and Chinese debt problems. The uncertainty and risk-off sentiment was well reflected in performance, with large losses across global equities,bonds, and property (in United States dollar (USD) terms), as well as a strengthening dollar. Local assets did not escape the sell-off. The All-Share Index was pulled down by large losses in resources, as well as concerns around Chinese regulatory changes and contagion effects that flowed into the performance of local listings with Chinese exposure.

AUGUST, 2021

Global markets provided strong returns for August amidst many market-moving events and news, including significant geopolitical tension from the situation in Afghanistan and continued regulatory intervention in China. While most primary equity indices globally
ended the month higher, the local index was pulled down by resource counters and consumer discretionary stocks, as well as a steep fall in Naspers and Prosus (as concerns around Chinese regulations impacted their tech exposure).

JULY, 2021

July provided a strong set of returns to local investors in growth assets, except for property, which took a breather amidst companies assessing damages related to the recent unrests in areas of Gauteng and KwaZulu-Natal. Offshore markets, both bonds and equities, also mostly reported strong performance, with returns slightly enhanced by the weaker Rand. Global economic headlines are still primarily focussed on inflation and potential tapering, as the global recovery moves ahead. United States (US) growth accelerated to 6.5% quarter-on-quarter and consumer confidence jumped back to pre-pandemic levels, while Europe saw stronger than expected 2% quarterly growth for the second quarter.

JUNE, 2021

Market performance was relatively mixed for June, especially among equity markets, while bond yields ended mostly higher. Apart from a few areas of performance, it seems that the positive economic indicators and factors that have been driving markets were partly overshadowed by higher inflation expectations, general talks and discussions around the tapering of stimulus across various major markets and rising COVID-19 infections across many countries. Locally, equities struggled amidst a sharp div e in gold and platinum pric es that filtered through to the large mining companies as well as to the general resources sectors. The heavy weighted Naspers and Prosus also sold off on the back of concerns regarding value unlock (despite a general run-in global tech shares during the month).

MAY, 2021

We have firmly entered the end of the first half of 2021
with another busy month that has passed: from inflation
scares, a crypto-crash, conflict in the Middle East and
rising COVID-19 infections driving uncertainty abroad to
local headaches caused by weaker employment statistics,
increased lockdown measures, conflict in the ruling political party and the resurgence of load shedding. Despite this,continued improvement in most countries’ economicdata indicators pushed markets higher, allowing for a relatively generous month of performance. Although most markets added relatively strong returns, emerging markets outperformed with cyclical value counters being thewinners, while the large tech companies suffered losses.

APRIL, 2021

April provided another strong batch of returns as
general positive sentiment, driven by increasing levels of
global stimulus, stronger global growth combined with a weakening United States (US) dollar and strong corporate results supported capital flows into growth assets. Market optimism seemed to rely on the return of normal consumer spending/behaviour as vaccine rollouts and the easing of restrictions gain momentum across most countries, with highly accommodative policies acting as a backstop. This came as the US Federal Reserve, once again, assured the market that they will maintain interest rates at current levels and continue to support the economy. 

March, 2021

March, the anniversary of local and global lockdown measures, ended the strangest and most uncertain year that many of us have ever experienced. From complete shutdowns in economic activity to restrictions on and tracking of movement, and prohibitions on gatherings and family visits, the recovery from a year ago has indeed been quite impressive, albeit with many panic attacks in between.


Global inflation fears resurfaced in February, playing off against optimism around the US stimulus package and continued vaccine rollouts. Locally, we had the State of the Nation address, the annual National Budget speech, our own vaccine roll-out rollercoaster, and lockdown level adjustments, making it an eventful month.

January, 2021

It was a positive start to the year as local assets delivered strong returns, with local equities posting the best start to a year since 2012. The only exception was local property, taking a breather from the relatively strong recovery over the past few months. Global markets were slightly more mixed, with returns being relatively muted compared to those achieved locally. As the rand depreciated slightly throughout the month, local investors received a currency pickup from their offshore investments, with the average global flexible portfolio returning 3.5%.

December, 2020

December brought a relatively pleasant end to a difficult year in terms of investment performance. All local asset classes added positive returns for the month, with property once again rebounding strongly. Despite positive returns from offshore investments, the average global flexible portfolio was pulled down by the strong rand appreciation over the past few months, leaving the average flexible offshore investment with a negative return for both December and the fourth quarter.

November, 2020

Financial markets delivered on the expectations of much better performance in November relative to prior months. Buoyed by optimism around the development and success of COVID-19 vaccines, progress in the United States (US) elections, as well as further confirmation of a growth rebound, both local and global assets surged in the month. This performance more than offsets the negative to weak months of September and October and continues to build on the positive market trends since the March crash.

October, 2020

It seems that the 2020 whirlwind is showing no signs of easing, as October proved to be another rollercoaster month. Many countries went back into lockdown, United States (US) citizens were getting ready to vote (while the rest of the world held their breath), the United Kingdom (UK) moved closer to a ‘hard Brexit’ as Prime Minister Boris Johnson is yet to conclude a favourable deal, and Europe is facing increasing recession risks.

September, 2020

It was a busy month in terms of economic data and market-moving events. In the US, the Federal Reserve disappointed the market as it failed to announce any additional stimulus measures. The Republicans and Democrats are also still debating the magnitude of their second-round fiscal support package, causing some frustration. Furthermore, Presidential elections are causing volatility, after a heated and very unproductive first presidential debate set a concerning tone for things to come. Rising COVID infections and the so-called second wave have taken hold in many countries, especially across Europe, with some reinstating lockdown restrictions. Fears are also running high in the US, as winter approaches in the Northern Hemisphere, and after the recent reports that the US President and First Lady have both tested positive for the virus.

August, 2020

On the global front, August saw positive performance across most markets on the back of optimism around vaccines, reopening of economies, progress in US/China trade talks, and ongoing liquidity. In the United States (US), the S&P 500 hit record highs again, delivering the fifth month of strong returns. This takes the index back to pre-COVID levels and ends the shortest bear market in history. The performance remains very concentrated, however, with the primary drivers being the large-cap Tech stocks (shown in graph), while there is still a majority portion of stocks on the index in the red. The United Kingdom (FTSE 100), Germany (DAX), Japan (Nikkei), and China (Shanghai) equity markets also posted strong returns in August, however, most of these indices are still down year-to-date.

July, 2020

July delivered a mixed bag of performance as some major markets, such as the United States and China, finally made the switch to positive year-to-date returns, while others (Europe, United Kingdom, and Japan) had another down month. Globally, tech shares have been the primary drivers of equity market performance, with the attribution clearly visible in the divergence of the year-to-date price returns for the diversified S&P 500 Index (1.3%) against the tech-heavy Nasdaq 100 Index (24.88%).