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Welcome to Taking Stock
Spring 2018

November 2018
By Sangeeth Sewnath, Deputy Managing Director

I write this as Investec Asset Management prepares for an exciting new chapter in our journey. In September, the Investec Board announced that Investec Asset Management would split from Investec Group to become a separately listed entity. This is a natural evolution for our business which will ultimately lead to the creation of a more focused and independent asset manager. The important message to you is that this process will have no impact on our portfolio management or client teams. We remain fully committed to delivering the service you expect from us and managing your money to the highest standard.

Hendrik du Toit, now the joint CEO of Investec, will return to Investec Asset Management as Executive Chairman once the demerger is completed. In this issue of Taking Stock he reflects on the early days, the importance of embracing sustainability and the opportunity for active managers.

Hendrik founded Investec Asset Management 27 years ago. Sometimes it is good to take a step back, not only to reflect on how we started, but also to appreciate how far we have come. Last month, several of our advisor clients from around the world – from eleven different countries, to be precise – attended an investment conference we hosted here in Cape Town.

It was refreshing to view our business from their perspective. It struck me that what they value about us is that we are a truly global business rather than a regional player with an offshore offering. They appreciate that we have more than two-thirds of our investment team spread across London, Hong Kong, Singapore and New York and they recognise that we manage money for some of the world’s largest sovereign wealth funds.

Furthermore, the debate on active versus passive is far more aggressive. When they look at our fund offering, they acknowledge that the active share in the Investec Global Franchise Fund, for example, is 92%. They value that it can’t be replicated in an index. That differentiation matters to them.

We are unashamedly active asset managers. We will ensure that we remain sufficiently differentiated and have conviction in the active positions we take. There is no room to be average. Average managers will lose to passive investing.

While our international portfolio managers were in South Africa, we hosted parallel events in Cape Town and Johannesburg for our clients to meet them. We tend to be somewhat pigeonholed into our core range of three offshore funds, so this was a wonderful opportunity to give our clients a glimpse into the variety of other capabilities we offer – including the UK, European and China strategies.

In this issue, we publish the third article in our series on living annuities. Jaco van Tonder talks to the importance of growth assets in a living annuity portfolio.

While the research on living annuities focuses on those close to or in retirement, we have also included an article by Paul Hutchinson in which he sets out the rules of thumb that you can use throughout your working career to check whether you are on track to retire comfortably. His findings clearly show the significant impact that active asset management can have on ensuring a comfortable retirement.

Markets have not been kind to investors this year. Now more than ever your clients need your guidance – continue holding the line and do not bow under pressure to make irrational decisions. As we have stated previously, we would welcome the opportunity to help you reinforce the message to your clients. We will also be opening our Taking Stock event early next year to more guests so that you can extend an invitation to more of your clients.

There are still opportunities out there and as always, the time to invest is now.

Thank you for your continued support.


Important information

All information provided is product related, and is not intended to address the circumstances of any particular individual or entity. We are not acting and do not purport to act in any way as an advisor or in a fiduciary capacity. No one should act upon such information without appropriate professional advice after a thorough examination of a particular situation. This is not a recommendation to buy, sell or hold any particular security. Collective investment scheme funds are generally medium to long term investments and the manager, Investec Fund Managers SA (RF) (Pty) Ltd, gives no guarantee with respect to the capital or the return of the fund. Past performance is not necessarily a guide to future performance. The value of participatory interests (units) may go down as well as up. Funds are traded at ruling prices and can engage in borrowing and scrip lending. The fund may borrow up to 10% of its market value to bridge insufficient liquidity. A schedule of charges, fees and advisor fees is available on request from the manager which is registered under the Collective Investment Schemes Control Act. Additional advisor fees may be paid and if so, are subject to the relevant FAIS disclosure requirements. Performance shown is that of the fund and individual investor performance may differ as a result of initial fees, actual investment date, date of any subsequent reinvestment and any dividend withholding tax. There are different fee classes of units on the fund and the information presented is for the most expensive class. Fluctuations or movements in exchange rates may cause the value of underlying international investments to go up or down. Where the fund invests in the units of foreign collective investment schemes, these may levy additional charges which are included in the relevant Total Expense Ratio (TER). A higher TER does not necessarily imply a poor return, nor does a low TER imply a good return. The ratio does not include transaction costs. The current TER cannot be regarded as an indication of the future TERs. Additional information on the funds may be obtained, free of charge, at The Manager, PO Box 1655, Cape Town, 8000, Tel: 0860 500 100. The scheme trustee is FirstRand Bank Limited, PO Box 7713, Johannesburg, 2000, Tel: (011) 282 1808. Investec Asset Management (Pty) Ltd (“Investec”) is an authorised financial services provider and a member of the Association for Savings and Investment SA (ASISA). A feeder fund is a fund that, apart from assets in liquid form, consists solely of units in a single fund of a collective investment scheme which levies its own charges which could then result in a higher fee structure for the feeder fund. The fund is a sub-fund in the Investec Global Strategy Fund, 49 Avenue J.F. Kennedy, L-1855 Luxembourg, Grand Duchy of Luxembourg, and is approved under the Collective Investment Schemes Control Act. The full details and basis of the award, affirmed on 25.01.17, are available on request.

This document is the copyright of Investec and its contents may not be re-used without Investec’s prior permission. Issued by Investec Asset Management, November 2018.