Times Of Swaziland: EQUITY INVESTMENTS STILL PROFITABLE

EQUITY INVESTMENTS STILL PROFITABLE
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 BY ASHMOND NZIMA   on 06/08/2020 00:56:00


MBABANE – While 2020 is proving to be a very challenging year on many fronts,
the Eswatini equity investor is still able to make money.
The African Alliance South African Prescient Equity Fund has performed well
against the challenging backdrop, gaining +7.5 per cent return year-to-date
while in the same period the average general equity fund has lost its investor
8.1 per cent.
Equity funds invest in stocks/shares of listed companies across the markets and
sectors.
Equity is considered a risky investment but as a result has the potential to
deliver higher returns than fixed income or money market returns over the long
term.
Pension funds and investors with a long-term goal of generally five years should
have exposure to equity funds.
Exposure
The Prescient Equity Fund is said to be for investors seeking broad-based
exposure to the South African equity market. This Fund is appropriate for
investors with a long-term investment horizon. Victor Langa, who is African
Alliance Eswatini General Manager, in an interview, confirmed the good
performance of the Fund.
“The Fund is a solution we are using for all of our clients that are seeking
exposure to the SA equity market. It is used as a building block in a total
portfolio sense to ensure that the local investment regulations are adhered to
– that of the 50 per cent local asset allocation,” Langa explained.
Every pension fund managed by African Alliance Eswatini with SA equity exposure
is said to be benefitting from this strong performance. What has worked well for
the Fund is the strength of the investment process.
“We actively manage our portfolios and that has enabled the fund to react in a
positive and efficient manner during times of market stress,” said Langa.
He stressed that investment managers began the year optimistic about the
prospects of the year ahead.  “The global economy was on a strong footing and
a trade deal was on the table between the United States and China; to partially
end what was the longest trade dispute between the two world super powers.
“Little did we know that COVID-19 was about to unleash its devastating effects
on the global economy.
Unfold
“Investors are rightfully concerned as the pandemic continues to unfold. The
world is operating in unprecedented times as we deal with the consequences –
the likes of which have not been seen since the Spanish Flu of the early 20th
Century,” he said.
Langa has shared that until the world can find a cure, there is a need to adjust
to a new normal. “At African Alliance we are doing great during this time, the
performance of our funds – in both absolute and relative terms – remains
strong” said Langa. “Our investment team has no particular style bias (we
are style agnostic), which differs to the peer group that often follow a style
of investment management, typically growth or value. We combine both a bottom-up
and top-down approach when screening, building and positioning the Fund,” he
said.