Prescient Investment Management

As has always been the case, investors, generally speaking, seek stability without sacrificing growth potential. While equities typically dominate the spotlight, credit investments offer a compelling alternative that is both resilient and adaptable, especially when included as part of a diversified portfolio.

As the age-old saying goes, ‘Don’t put all your eggs in one basket.’ At Prescient Investment Management, we believe that having your eggs in different baskets is essential. However, if they’re all in the same truck and on their way to being sold in the same market, how diversified are the risks and rewards, really?

Credit quality and risk premia are critical considerations for fixed-income investors in an increasingly uncertain global environment and a South African economy marked by volatility and structural challenges. As South Africa’s leading systematic asset manager, we continue to witness first-hand how these factors influence decision-making across portfolios, particularly in the current economic uncertainty and market volatility environment.

As the world faces increasingly complex challenges, robust and scalable financing models to support infrastructure development have become a pressing priority. Infrastructure is critical in driving economic growth, enhancing connectivity, and improving quality of life, yet many regions struggle with inadequate or outdated systems

In the complex landscape of global finance, investment strategies must be both sophisticated and flexible. At Prescient Investment Management (Prescient), our systematic investment approach prioritises asset allocation and risk management, providing our clients with access to a diverse range of global investment funds. These funds are tailored to meet various objectives and risk appetites, offering options for those seeking stable income, long-term growth, or targeted exposure to specific markets.

When it comes to savings and retirement planning in particular, balanced funds stand out for their simplicity, effectiveness, and ability to weather market storms. These versatile investment vehicles typically combine multiple asset classes in a single portfolio, with the lion’s share invested in equities and bonds. They offer retirees and investors still building their retirement savings a powerful tool to withstand market volatility through the diversity of a multi-asset portfolio, assisting individuals in achieving their financial goals over time.

Equity investments have long captivated investors with their promise of substantial returns compared to other asset classes. The latest evidence shows that they live up to this promise, substantially outperforming cash over the long term and underperforming less often than expected.

Portable alpha investment strategies emerged in the late 1980’s and early 1990’s as an innovation within institutional portfolio management, driven by the increasing demand for investment approaches that could generate excess returns, or "alpha," independent of market-related risk exposures, generally referred to as "beta." Strictly speaking, alpha is the return that is not explained by the beta-adjusted return.

When it comes to savings and retirement planning in particular, balanced funds stand out for their simplicity, effectiveness, and ability to weather market storms. These versatile investment vehicles typically combine multiple asset classes in a single portfolio, with the lion’s share invested in equities and bonds. They offer retirees and investors still building their retirement savings a powerful tool to withstand market volatility through the diversity of a multi-asset portfolio, assisting individuals in achieving their financial goals over time.

The recent sharp sell-off in stock markets has alarmed many investors, driven by mounting concerns that the Federal Reserve may have kept interest rates too high for too long. Fears are growing that the risks of a U.S. recession have now risen past a point where it cannot be turned around. The headlines are filled with dire warnings, and market sentiment appears to be shifting towards panic. But is there truly a reason to be alarmed? As a data-driven, scientific investment firm, we firmly believe that the answer is no.

Buckle up, because the market roller coaster just hit turbo mode. The VIX, the market's beloved "fear gauge," has doubled in August, flashing a big, bright warning sign: volatility is back with a vengeance. So, what does this mean for our investments? Should we be hedging our bets, or is it time to embrace the chaos? Let's dive into the Prescient way of navigating these stormy waters.

The latest investment flow data from South Africa's Collective Investment Schemes (CIS) paints a familiar picture - investors trying and failing to time the market. In July 2024, we saw a significant shift in money out of equity funds and into fixed-income funds, with net outflows of R10.9 billion across all fund categories.