Investment Review – April 2022

Market Indicators

  • JSE All Share (ALSI) 72,438.2503
  • Rand/Euro R 16.65
  • Rand/Pound R 19.86
  • Rand/US Dollar R 15.79
  • Rand/Aus Dollar R 11.15

The Great Rotation?

In the aftermath of the Global Financial Crisis, and the easy monetary policy and stimulus which followed, it has been a relentless surge upwards in investment markets, momentarily paused only by the COVID pandemic in 2020. As at the end of 2021, the average 10-year return for an investor in the S&P 500 was 15.8% per year in US dollars. A full 14% above inflation, per year, for a decade!

While the current pullback is unwelcome, and can cause anxiety and stress for investors, at least it is coming off a lofty perch where wealth levels have been elevated for some time. However, underneath lies a more complex story, where capital flows are moving out of the high fliers and into the more unloved shares, often neglected over the past decade of easy money.

In this month’s commentary, we explore the potential for this to be the start of a ‘great rotation’ away from the past winners and into the broader undercurrent of investment opportunities with the ability to preserve and grow capital in future.

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The Allan Gray-Orbis Global Equity Feeder Fund remains fully invested in global equities. The objective of the Fund is to outperform the FTSE World Index at no greater-than average risk of loss in its sector.