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Welcome to Taking Stock
Winter 2019

Sangeeth SewnathAugust 2019
By Sangeeth Sewnath, Deputy Managing Director

Chip Conley, a successful boutique hotelier who sold the company he founded and ran as CEO for 24 years, joined AirBnB at the age of 52. Not only did he have to make the transition from bricks and mortar to a Silicon Valley tech start-up, but he reports into a CEO more than two decades his junior. As he writes in his recently published book, Wisdom at Work: The Making of a Modern Elder, “Sixty may be the new 40 physically, but when it comes to power, 30 is the new 50!” What experience and age can bring, he argues, is wisdom, which he defines as the ability to see the patterns in things, something one should theoretically get better at with time (and therefore age).

I found much overlap between his views on age and wisdom and those of expert gerontologist, Sarah Harper. Sarah, who was the keynote speaker at the 2019 Nobel Prize Dialogue, presented at the Investec GlobalSelect conference we hosted in London in June. As an aside, I was pleased she could confirm that man flu is in fact a genetically justifiable phenomenon! More seriously, she guided a conversation on the impact of longevity on financial planning and whether in our lifetimes living longer by five to ten years would add to retirement years, or whether we are likely to be cognitively clear and physically strong enough to successfully work in a modern economy.

The overarching theme of the GlobalSelect conference was Investing for a better tomorrow. Discussions were not limited to thinking about the sustainability of our clients’ futures, but also addressed how we invest sustainably. Deirdre Cooper, Portfolio Manager of our newly launched Global Environment strategy, spoke powerfully about the force of good that we can be as a significant manager of assets.

The theme was carried through to an interview with Hendrik du Toit (joint CEO of Investec), in light of our demerger from the Investec Group and our future as an independent asset manager. In Hendrik’s words, “when you make your business smaller, you make your clients bigger.” That resonated with me personally. While we may manage more than R2 trillion globally – the equivalent of the entire SA unit trust industry – we remain close to every rand coming in or leaving from advisors. It matters to us. I encourage you to watch the highlights video of the event, which can be found at

I couldn’t sign off this note without some reference to the markets. Despite a rather turbulent first six months, the SA equity market ended the period up a respectable 12%, in line with what Clyde Rossouw and his Quality team anticipated. Interestingly, the team’s overweight positions in their preferred opportunities – global equities and domestic bonds – really benefited our Investec Cautious Managed Fund, which had a strong performance uptick.

Despite this, 120% of the industry net flows* over the last quarter went into fixed income funds. Surprisingly, offshore net flows into feeder funds were negative. Either investors are going directly offshore into share portfolios, which they need to consider carefully, specifically from a tax perspective, or they are waiting on the sidelines watching the rand.

With so much focus on costs, we hear more and more about the benefits of passive investing. We would argue that you should consider whether you’re getting value for money, rather than fixating on costs. Put simply – might it be worth paying 25 to 50 basis points more if your investment is generating an additional 1% in returns ever year? Over the last 20 years, our flagship Investec Opportunity Fund has not only provided SA equity-like returns, but at almost half the volatility. In this edition, Clyde emphasises the importance of managing downside risk in the Investec Global Franchise Fund, given global growth concerns and geopolitical uncertainty.

Enjoy this edition of Taking Stock. Let’s hope the markets remain supportive for the remainder of 2019.

Sangeeth Sewnath
Deputy Managing Director

* Based on our estimates using Morningstar data.

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.
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