Tag: investmentstrategy

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.

The 2026 Budget Speech, delivered by Finance Minister Enoch Godongwana in February 2026, has generally been described as a “good news” budget. At a macro level, the strides toward fiscal consolidation are notable. Additionally, the increase in VAT for Small and Medium Enterprises (SMEs) reflects a shift in revenue strategy. These developments support key socio-economic measures, including employment.

Despite recent diplomatic peace efforts from the US, the US-Israel war on Iran has now entered its fourth week. As a result, the situation remains extremely volatile. Moreover, ongoing Middle East tensions continue to heighten uncertainty across global markets. As the days pass, the risk of a stagflationary environment increases. In this scenario, low growth and high inflation occur simultaneously.

Geopolitics often feels distant. Many people see it as something that happens far away, involving borders or disputes over natural resources. These events usually take place on the other side of the world. However, the reality is far more personal for the average South African household. This is precisely why geopolitics matters to your pocket.