Tag: investmentstrategy

What does it mean to be the best possible custodians of our clients’ capital? To us, it means equipping our clients to build wealth over the long term. This is a broad mandate, and it presents more challenges than first appear. Markets are constantly changing. These changes extend beyond the daily gyrations that dominate headlines. At a deeper level, relationships between asset classes, leading market sectors, and levels of market concentration shift over long cycles.

Electricity transformed the world, not simply because it existed, but because of what it made possible. That distinction may prove important as we think about Artificial Intelligence (AI). In 1882, Thomas Edison built the world’s first commercial power station at 255 Pearl Street in Lower Manhattan, New York. The incandescent light bulb was revolutionary. However, the real breakthrough was the system behind it: the generators, cables, meters, and distribution network.

For many aspiring property investors, the appeal of property lies in its perceived simplicity. Buy a building, tenant it, collect rental income, and watch the asset appreciate over time. Yet the reality is far more complex. Successful property entrepreneurs understand a fundamental truth: a building is not automatically an asset. It is a business.

There is no shortage of reasons for investors to feel uneasy at the moment. Geopolitical tensions between the United States and the Middle East continue to make headlines. Oil prices have also spiked in parallel. Locally, the economy remains trapped in a low-growth environment. Unemployment and the escalating cost of living also continue to weigh heavily on South African households.

As we settle into the second half of 2026, global market returns continue to reflect themes pulling markets in different directions. There has been an almost unprecedented combination of geopolitical tension, volatile oil prices, persistent inflation and uncertainty over interest rates. Added to this are the extraordinary gains delivered by Artificial Intelligence (AI). These gains have become concentrated in a small number of large companies.

In all the excitement about Artificial Intelligence’s (AI’s) transformative potential for our economies and the resultant efficiency gains, it is easy to forget that a business case is not necessarily the same thing as an investment case. While technologies can and do transform societies in deep and fundamental ways, it is less clear who benefits from the technology race.

Investors have a limited edge in predicting geopolitical outcomes. Our value-add lies in assessing the relative economic exposure of different countries. It also lies in judging what the market has priced into different sectors and determining how to allocate risk accordingly within a geopolitical risk investment strategy.

South African bond markets rewarded fixed-income investors with exceptional calendar-year returns in both 2024 and 2025. The All Bond Index (ALBI) returned 17% and 24%, respectively. These returns significantly exceed the norm. Therefore, we anticipated moderating performance in 2026.

Our philosophy has not changed; the environment in which we execute it has. For over two decades, our investment philosophy has been grounded in a simple principle. High-quality companies that can reliably grow dividends tend to deliver more predictable long-term outcomes. This principle remains the foundation of how we invest. However, the environment in which we apply this philosophy has changed.

Read our exclusive cover story titled The innovation factory – built for famine, not a feast? by Lauren Drake, Co-founder & Director, FiftyKnots, plus a host of other topical management articles written by professionals, consultants and academics.