Sasfin Asset Managers Philip Bradford, CFA BCI Conference May 2018

Transcription

1 Sasfin Asset Managers Philip Bradford, CFA BCI Conference May 2018 SLIDE TITLE Sub Title

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3 Is there life after junk? or is it a trainwreck?

4 Those who don t know history are doomed to repeat it. Edmund Burke

5 Source: Bloomberg & Iress What happens after a downgrade?

6 YIELD % 18 Brazil 10yr Bond S&P Downgrade Moody's Downgrade Source: Bloomberg & Iress 8 Feb 14 Sep 14 Mar 15 Oct 15 May 16 Nov 16 Jun 17 Jan 18

7 YIELD % 18 Russia 10yr Bond 16 S&P Downgrade 14 Moody's Downgrade Fitch Downgrade 6 Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Jul-16 Jan-17 Jul-17 Jan-18 Source: Bloomberg & Iress

8 South Africa 10yr Bond S&P and Fitch Downgrade SA Source: Bloomberg & Iress

9 18 16 S&P and Fitch Downgrade Source: Bloomberg Source: Bloomberg & Iress USDZAR

10 S&P and Fitch Downgrade SA Fitch Downgrades Russia Moody's Downgrades Russia S&P Downgrades Russia Source: Bloomberg & Iress USDZAR USDRUB

11 ,5 S&P and Fitch Downgrade SA Moody's Downgrade Brazil 3, S&P Downgrade Brazil 2, , , Source: Bloomberg & Iress USDZAR USDBRL

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13 Equity Bond Return Comparison Should I ever buy bonds in a long-term aggressive portfolio? Source: Bloomberg & Iress Equities Bonds PRICE INDEX

14 30 Year Returns in ZAR 18% SA Property EM Equity SA Equity SA Equity 14% SA Bonds Global Equity SA Cash Global Bonds Return 10% SA CPI Global Cash SA CPI 6% 2% 0% 2% 4% 6% 8% 10% 12% 14% 16% 18% 20% 22% 24% Risk Source: Bloomberg & Iress

15 20 Year Returns in ZAR 22% SA SA Property 18% SA Equity Return 14% SA Bonds EM Equity Global Equity 10% 6% SA Cash SA CPI Global Bonds Global Cash 2% 0% 2% 4% 6% 8% 10% 12% 14% 16% 18% 20% 22% Risk Source: Bloomberg & Iress

16 10 Year returns in ZAR 18% 14% SA Property Return 10% SA Bonds Global Equity SA Equity 6% SA Cash SA CPI SA CPI Global Bonds EM Equity Global Cash 2% 0% 2% 4% 6% 8% 10% 12% 14% 16% 18% Risk Source: Bloomberg & Iress

17 20,00% Asset Class Returns 15,00% 10,00% 5,00% 0,00% -5,00% -10,00% 1 Year 5 Year 10 Year 20 Years 30 Years SA Equity SA Bonds SA Property SA Cash SA CPI Global Equity MSCI EM Global Bonds Global Cash

18 5yr return expectations Asset Class Income Yield Income Growth FX+/- Credit Exp 5yr Range SA Cash 6% to 7% n/a n/a 6% to 7% Bonds 8% to 10.5% n/a n/a +2% 8% to 12.5% SA Property 5% to 8% +4% to +8% n/a n/a 9% to 15% SA Equities 5.2% +5% to +15% -5% to +15% n/a 6% to 18% US Equities 4.4% +5% to +10% -5% to +15% n/a 5% to 15% Global Bonds 1% to 3% n/a -5% to +15% +2% -4% to 8% Global Cash 0 to 1% n/a -5% to +15% n/a -5% to 7% Gold 0%? -5% to +15% n/a -5% to 15%? Bitcoin 0%? -5% to +15% n/a -99% to 5000%

19 Where would you rather live?

20 Fund Range Opportunity Equity Global Equity Equity Return Flexible Income Stable Balanced Prudential Optimal Income Risk

21 Disclaimer Disclaimer Disclaimer & Legal Sasfin Asset Managers (Pty) Ltd, FSP Licence no (Co. No. 2002/003307/07) a member of the Sasfin Group of companies ( Sasfin )29 Scott Street Waverley Johannesburg 2090; PO Box Grant Park 2051; Tel ; The information in this report may relate to investment or asset consulting services provided by Sasfin. Portfolios may be contained and or administered within a fund policy, collective investment or other third party investment product or platform. Returns have been calculated using the most accurate sources available and while every effort is taken to ensure the accuracy of the information contained herein, Sasfin shall not be liable for any errors or omissions and disclaims any responsibility for any action which may be taken based on such information. Performance returns are generally calculated gross of fees, except where a component yield already includes such fees. Benchmarks are probability indicators for ongoing targeting and assessment purposes and are not guaranteed. Where historical data and reasonable market related assumptions have been used in the construction of data, these are general indicators only for the purpose of ongoing targeting and assessment and are not guaranteed. The portfolio(s) may involve a high degree of risk including, but not limited to, the risk of low or no investment returns, capital loss, counterparty or issuer default, adverse or unanticipated financial market fluctuations and inflation. The value of portfolio(s) may fluctuate daily as a result of these risks and historic yields are not a reliable indicator of future performance. This fact sheet is not intended to be financial advice or a recommendation and investors must consult their advisors and independently assess and confirm all material information and understand all risks and issues before making any decision or taking any action. Any views and opinions expressed in this report do not necessarily reflect the views of Sasfin. The contents of this report are proprietary and have been issued for the use of Sasfin s clients and may not be distributed, copied or published without permission. 21

22 Thank you