Episodes
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Today is our first episode of a new underlying series in partnership with Morningstar South Africa and their Head of Investments - Sean Neethling, who was on the show not too long ago.
This new series is aptly called: ‘Mind over Markets with Morningstar’ and will provide the latest insights on monthly investment trends.
So, for the foreseeable future, the first Monday of every month, we will be exploring key market developments and dissecting economic indicators, which will cover everything from equities and fixed income to commodities and alternative investments.
US Equities have continued to dominate global markets since the world emerged from the COVID-19 pandemic in 2020 and have been supported by exceptional performance by American tech companies, the so-called Magnificent Seven, leading valuations to all-time highs.
According to Morningstar data The S&P 500 returned 29.8% over the 12 months to end March 2024 and the Nasdaq delivered 39.2% over the same period. In short, if you had exposure to US equities, especially, listed tech stocks, you would have been in a very fortunate position today.
It seems that Nvidia continues to be the standout with the company maintaining its competitive edge in generative AI but we are starting to see some divergence in the performance of US tech companies.
Given the mixed earnings reports and the unclear path of interest rates in the US, what performance indicators should investors focus on to navigate this potential fork in the road for American tech companies?
Listen to this podcast to find out.
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The two-pot retirement fund system is the most significant reform that the local pension fund industry has seen in recent years.
Besides getting a handle on the legal changes — including the Revenue Laws Amendment Bill and the Pension Laws Amendment Bill —each private and public fund will also have to amend its rules to accommodate the new regime.
The Financial Sector Conduct Authority - or FSCA for short - already allowed the funds that fall under its jurisdiction to start submitting their rule amendments from the beginning of the month. Rule amendments must be approved, or funds won’t be able to seed the savings pot or pay out withdrawals.
But if the red tape is not enough to keep administrators up at night as the 1 September deadline looms, industry experts have warned that the expected volume of withdrawal applications could add fuel to this fire.
Tackling misinformation about the new system will also be tricky. It is for this reason that I invited John Anderson, Executive: Solutions and Enablement at Alexforbes into the studio today to help navigate Citywire listeners through some of the details of this expected frenzy.
Some of the misconceptions cleared up in this episode include the fact that the new system is indeed starting on September 1, despite some beliefs to the contrary. The initial setup of the savings pot is not a one-time opportunity; it will be accessible annually under certain conditions. And Not everyone will receive the maximum R30,000; it’s based on 10% of their accumulated savings, subject to a cap.
Tune in to understand some of the finer details around the new regime and find out more about the importance of thorough preparation and clear communication as the industry transitions to this new system, which ultimately aims to improve retirement outcomes for its members.
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In this episode, we delve into the essential topic of default regulations and their impact on investors and retirees. We'll explore the significance of these regulations for investment portfolios, the crucial roles of trustees and financial advisers and the strategic setup of the Investment Policy Statement. Discover how these regulations, implemented in March 2019, guide the provision of default investment portfolios and influence retirement savings strategies, including post-retirement products like annuities. Joining us today is Johann Peens, an independent registered financial adviser with the Financial Planning Institute of South Africa. Johann shared his expertise on advising clients about these regulations and ensuring they receive good value for their retirement savings. Tune in to learn how standardised practices can help members retire comfortably and how the two-pot retirement system has made independent advice more important than ever before.
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The South Africa of 1995 was a very different place. The country was basking in the glow of its first democratic elections the year before. We won the Rugby World Cup for the first time and DStv had just launched.
The Johannesburg Stock Exchange also looked vastly different.
At the time, 600 companies were listed on the exchange. Only six of the companies listd in the Top 40 index then – Anglo American, Richemont, Standard Bank, Sasol, Nedcor (now Nedbank), Absa and GoldFields – remain among the 40 largest shares on the bourse today.
And with BHP’s recent bid for Anglo, we don’t know how long, or even if, it will stick around.
The increased number of companies de-listing from the JSE has elevated investor concerns about the outlook for local equities. The shortage of new listings, the relatively weak performance of local shares and depressed levels of business confidence have further fanned fears among market participants.
While the delisting trend is concerning, our discussion today is less about the number of companies vanishing from the equity market and more about the level of market concentration and its impact on investment portfolios.
Citywire South Africa invited Sean Neethling, head of investments at Morningstar Investment Management South Africa into the studio to talk about what this means for money managers.
Neethling joined the business in July 2021 and is responsible for Morningstar South Africa’s domestic and global portfolios. He also oversees the firm’s entire investment capability and strategy.
This is what he had to say.
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Many South African investors are seeking offshore opportunities, whether for diversification purposes or a currency hedge, or due to an economic or a political agenda.
However, a recurring, underlying problem in such decisions is that most individuals don’t realise how their foreign investments may impact their estate on death.
Offshore probate refers to the process of applying for the right to deal with a deceased person’s foreign assets and proving their will as a valid legal document in a foreign jurisdiction.
A grant of probate can be seen as the equivalent of a letter of executorship in South Africa and serves as the formal acknowledgement by a foreign court that a will is enforceable. It also confirms that the persons named as executors under the will have the authority to manage the estate.
The process may vary in different jurisdictions, which can make it extremely complex.
For this reason, I invited Albert Coetzee, head of the Ninety One Global Investment Platform, into the studio to explore whether probate will be required when investing in offshore-domiciled products, and if so, what that entails.
Apart from managing sales, Coetzee is closely involved in the servicing, product, marketing, legal and compliance, as well as the events aspects related to Ninety One’s Global Investment Platform.
He is a qualified lawyer and holds Bachelor of Commerce and Bachelor of Legislative Law degrees. He is also a certified financial planner.
Have a listen to the recording on when and where probate becomes a problem.
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Welcome to Money, Markets, and Masterminds,’ a Citywire South Africa podcast that delves into the intricate world of finance, investment and strategic decision-making.
In this episode, we explore the captivating journey of continuous professional development (CPD) in South Africa, with a specific focus on its impact within the tax advisory landscape.
In the studio today is Stiaan Klue, the founder and former CEO of the South African Institute of Taxation (Sait), who now heads up the Tax Faculty: an offshoot of Sait’s former development and training arm. He is also the founder of and a significant shareholder in the SA Accounting Academy – a CPD provider catering for the accounting profession.
Klue explained the importance of CPD for advisers who are navigating the complexities of South Africa’s financial and legal sectors, delving into its historical roots to its evolving role in shaping professional standards.
He shared his insights into the vital role that CPD and the professional bodies that manage the process have played in shaping the industries they operate in. Discover too how CPD programmes empower advisers to stay ahead, in a rapidly changing industry.
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Insurance brokers still play a vital role in the financial services industry in providing product expertise, access to markets, claims assistance and regulatory compliance support.
Despite technological advancements and alternative distribution channels, brokers continue to serve very specific needs in the value chain.
In this episode we are talking specifically about the significant role that insurance brokers play in driving growth within the funeral industry in South Africa, a country which collectively conducts about 480 000 funerals a year post-Covid.
In the studio we have Clinton Macdonald, CEO of KGA Life, a specialist funeral insurance underwriter, specialising in group schemes. It has a national presence through an extensive distribution network of intermediary partners, with offices in Gauteng, the Western Cape, Eastern Cape and the Free State.
In 2017, Macdonald joined KGA, which was founded in May 1986. He was appointed its CEO in 2019.
Listen to his insight into the funeral industry, which shows that intermediaries are often very localised within their communities and build trust with customers on a level that the product providers simply cannot attain themselves directly. And how the Covid pandemic set a very specific scene for why brokers still matter.
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As the global economy evolves, so do the strategies of institutional investors, including pension funds. With an aim to diversify their portfolios and optimise returns, many retirement funds across the continent are increasingly looking towards offshore investments. But I wanted to find out what exactly the trends are and what is driving this shift in mindset.
In the studio today, we have Derrick Roper, Chief Investment Officer of the Novare Group, as well as the Managing Director of Novare Equity Partners, a private equity firm in-vesting exclusively in Sub-Saharan Africa and outside of South Africa.
Before co-founding Novare, Derick worked for several large financial services companies in South Africa including Sanlam and Gensec Asset Management. He also spent some time in the UK where he gained experience in investment product development in the pension fund market.
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Welcome to 'Money, Markets, and Masterminds,' - a Citywire South Africa podcast - that delves into the intricate world of finance, investment, and strategic decision-making.
If you're a fund selector or an independent financial adviser, looking for insights, analysis, and expert opinions to enhance your perspective, you're in the right place - here with me editor - Ruan Jooste.
Today’s podcast is all about the latest economic trends and developments that are shaping economies around the world, with a specific focus on sovereign debt, and the controversial topic of prescribed assets.
One of the key concerns surrounding the South African economy is its rising government debt and the upward trajectory, reaching unsustainable levels, which means the servicing costs are growing astronomically, with the country not being able to show much for those increases.One proposed solution to address government debt levels is the implementation of prescribed assets, which is now an official fixture in the ruling party’s manifesto. It says it will forge ahead with plans to revive an apartheid-era rule compelling pension funds to plough money into certain government-approved investments, assuming it retains power in upcoming elections.
So, what are the chances of this playing out and what are the accompanying factors that investors should be most worried about. We invited Reza Ismail, the head of bonds at Prescient Investment Management into the studio to take us through the motions.
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On Tuesday I was invited to attend a media conference at the Association for Savings and Investment South Africa (ASISA), where the organisation introduced its Transformation Report, amongst other things.
It detailed the progress made by ASISA members between 2018 and 2022 and revealed that both life offices and asset managers had made encouraging strides towards achieving the relevant trans-formation targets set by the amended Financial Sector Code.
In addition, the local collective investment schemes statistics for the fourth quarter and the year ending December 2023 were released. My colleague Stephen Cranston covered all the newsworthy trends in detail here.
Today’s podcast, however, will focus on the local hedge fund industry and the latest statistics presented by Hayden Reinders, chair of the ASISA Hedge Funds Standing Committee and Head of Business Development and Client Management at Prescient Fund Services at the conference.
The SA hedge fund industry attracted record net inflows of R6.24bn in 2023 and grew its assets under management to R137.9 bn (excluding fund of funds). These assets are invested in 213 hedge funds, which are managed by 11 hedge fund management companies.
ASISA showed that the industry recorded healthy net inflows for the second consecutive year. Net inflows in 2022 amounted to R4.54 billion.
Listen to Citywire SA and Reinders further unpack the stronger uptake of hedge funds in SA, and ASISA’s fresher approach in presenting the data behind it.
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"Welcome to 'Money, Markets, and Masterminds,' - a Citywire South Africa podcast - that delves into the intricate world of finance, investment, and strategic decision-making.
If you're a fund selector or an independent financial adviser, looking for insights, analysis, and expert opinions to enhance your perspective, you're in the right place - here with me editor - Ruan Jooste.
The National Treasury of South Africa has proposed significant amendments to the country's retirement system over the last few years, and the introduction of a two-pot pension system was only one of them.
Initially planned for implementation in March last year, it is now anticipated to happen in September this year, however the date has not been set in stone by authorities yet.
Under the new system, retirement scheme members can access up to one-third of their savings before retirement. The remaining two-thirds will be preserved for after retirement.
In addition, Treasury proposed raising the amount initially accessible under this System from R25 000 to R30 000. How-ever, there are concerns regarding the potential consequences of this increase, such as higher withdrawal amounts and significant tax implications.
These issues were barely touched on in the recent budget review for the upcoming financial year.
So, there's a clear need for some serious conversations between advisers and their clients, the very contributors to these retirement products, on what the near- and longer-term implications of the proposed framework will be.
I invited Darren Burns - Head of Business Development at Graviton Wealth, which is part of the Sanlam group, to the studio today to help unpack some of the intricacies of these reform measures.
In his current role, Darren supports advisers to launch a business or grow their existing one. He is also responsible for developing retirement funds as a sustainable source of new business for IFA’S and their practices.
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‘Welcome to ‘Money, Markets, and Masterminds,’ – a Citywire South Africa podcast – that delves into the intricate world of finance, investment and strategic decision-making.
If you’re a fund selector or an independent financial adviser looking for insights, analysis and expert opinions to enhance your perspective, you’re in the right place, with me editor Ruan Jooste.
Finance Minister Enoch Godongwana delivered his annual national budget speech in parliament on Wednesday. It is one of the key tools, together with the State of the Nation Address, that transpired earlier in February, that the members of parliament can use to hold the government accountable for what it had promised to deliver and for how the allocated budget is spent.
Citywire South Africa covered the budget extensively during the course of Wednesday around the myriad of issues ranging from government’s spending, to how the fiscus will be replenished through policies and plans.
I attended a media briefing with the South African Institute of Taxation (or Sait for short) following the budget, where it shared its impressions of the annual event – where tax matters usually get the boring lap in the run. The professional body said that very little breakdown was done on how new tax proposals will be applied or the taxpayer will be impacted.
As such, I invited Sait CEO Keith Engel into the studio to assist me to paddle through the nuances of tax and how government policies are going to affect taxpayers and their advisers.
Engel is also the former chief director of tax policy at National Treasury.
