Allocating part of your living annuity to a smooth bonus fund can add tremendous value to reduce the extremes in your return experience and smooth out the bumpy ride of your retirement income. But how exactly do these funds work?
August saw equity markets from New York to Tokyo push higher, and the S&P 500 posted its strongest rally for August since 1986. However as risk assets continue to rally, globally, we see the disconnect between economic fundamentals and financial markets widen further. Locally, economic data suggests the aftermath of our draconian lockdown will be severe, as the SARB faces pressure to adopt quantitative easing measures.
As part of our investment process, our Manager Research Team meticulously screen the full universe of asset managers and their investment strategies, following a quantitative and qualitative process. We assess managers based on the three precise drivers and philosophies that underpin their investment performance: investment skill, risk factors and idiosyncratic style.
Integral to our on-going process, involves being in close contact with our underlying fund managers to understand their performance, positioning and also any changes that have occurred within their businesses. Each quarter we will be publishing a Fund Manager Changes industry report that will collate the business and team related highlights that occurred during the quarter.
The COVID-19 pandemic, and global governments’ reaction to stave off the spread through stringent restrictions, resulted in over 90% of the world economy going through some form of lockdown during March and April of this year. A clearer picture of the economic damage caused by the pandemic has now arisen.
As the second half of 2020 kicks off, the hope of a COVID-19 vaccine is helping to defuse risk aversion. “Here, for all the difficulty and human tragedy around the pandemic this is a well understood shock. It’s not hard to see that a disease has descended upon us and is causing havoc" : James Bullard
As more results of surveys and economic data became available during the second quarter of 2020, it became evident that this was one of the worst quarters in decades, in some instances the worst on record.