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Strike costs adding up

Intelligent investing means knowing what drives key markets. The latest (June) RMB Asset Management Summary says South Africa's civil service strike has crippled state institutions and may cost the economy billions of rands, while the impact of higher wages could push up inflation and interest rates.

Time to switch to riskier resources

It is time to switch capital from the retail and bank sectors, where the risks are predominantly on the downside, to the resources sector, where investors are expecting the worst and where, increasingly, it does not look as if the worst is upon them. That's according to Chris Freund, portfolio manager at Investec Asset Management.

Keeping tabs on it all

While the term asset management broadly refers to investment markets, a growing number of executives are applying its principles internally to their own organisations to cut costs, improve efficiency and generally contribute to good corporate governance. A Johannesburg analyst says this can be a complex process, but to accurately report to investors, asset management within an organi­sation has to be tightly monitored.

Online makes cents for investors

A growing number of investors are choosing to take their activities online in a move to better manage their assets by having an electronic record of their transactions and investments. It's fast, cheap and efficient. And it's a fact not lost on asset management firms. Established in 1974, Allan Gray claims it is the largest privately owned investment management company in Southern Africa.

Global markets are depressed

The global economic climate has left the markets facing uncertainty and there has been a clear downturn in the Western world, with the United States heading towards recession. In addition to the slowdown in the developed world growth, commodity prices, especially food and oil, are on the rise, impacting on inflation around the world.

The market usually comes out tops

How often does the market beat the asset manager? The consensus is that more often than not the market comes out tops. Sanlam Investment Management managing director Armien Tyer says in the United States few managers beat the index over the long term. According to one study, in the period between 1994 to 2004 about 80% of equity managers could not beat the S&P 500.

What makes a good manager?

When thinking about the characteristics of a good assest manager, it seems to come down to knowledge, philosophy and hard work. Cannon's chief executive officer Geoff Blount says passionate people are an important part of the mix.

To hedge or not to hedge?

Cannon Asset Managers' chief investment officer Adrian Saville says during volatile times investors often rush into hedge funds seeking protection. "But these have proved to be almost as volatile as equity markets with much lower rates of return. The experience of January 2008 comes to mind, when stock markets around the globe traded lower and hedge funds saw losses in that month too," he says.

Make a profit, make a difference?

Investors invest to make a profit. They want the best return for their buck in the shortest possible time span. Social responsibility does not usually come into play when people are deciding where to place their money. Of course, when they think aboutsocial responsibility they immediately equate it with having to sacrifice returns.