Page 164 - Profile's Unit Trusts & Collective Investments - March 2026

Chapter 9 Fund manager interviews

„ Diversification across asset classes reduces single-source risk. We do not rely on any one
driver of return.
„ Liquidity is carefully managed. Cash and liquid fixed income instruments provide flexibility in
volatile environments.
„ Derivatives such as forward currency and interest rate instruments may be used strictly for
efficient portfolio management and risk mitigation.
Our objective is to prioritise capital preservation while still delivering meaningful real growth over
time.

Comment on the year ahead and, if possible, estimate the performance of your fund over 2 or
3 years. What are your targets and objectives for the year ahead?
After a strong 2025, it is reasonable to expect more moderate returns going forward. Markets have
repriced meaningfully, and forward return assumptions are likely to be lower than those achieved
over the past year.
That said, we continue to see opportunities. South African bond yields remain attractive in real
terms, selected equities still trade at reasonable valuations, and offshore diversification remains
important.
Our objectives remain consistent:
„ Outperform the ASISA Multi Asset – Low Equity peer group over rolling one-year periods
„ Deliver returns meaningfully ahead of inflation over the medium term
„ Maintain relatively low volatility
Over a two to three-year horizon, investors should expect steady, compounding returns rather than
outsized equity-driven gains. The fund is designed to smooth the journey and reduce drawdowns,
not to maximise short-term upside.

Are equity markets in general overpriced? Do you anticipate a significant correction?
Valuations vary by region and sector.
Certain global growth segments appear fully valued, while other areas, including parts of the
South African market, still offer reasonable valuation support.
Market corrections are always possible, particularly following strong periods of performance.
However, predicting short-term timing events is not central to our process. Instead, we focus on
valuation discipline and portfolio balance.
Which asset classes do you expect will give the best total rates of return over the next few
years?
Over the next few years, we believe the most attractive risk-adjusted total return opportunities lie
in South African fixed income and selected South African equities.
Local bonds continue to offer compelling real yields relative to inflation and developed market
alternatives. Much of South Africa’s fiscal and macroeconomic risk is already reflected in bond
pricing, which provides investors with a meaningful income cushion. This creates an attractive
starting point for multi-year returns, with the potential for additional capital appreciation should
domestic policy credibility and economic stability continue to improve.
South African equities also remain reasonably valued compared to many global markets. The
JSE offers broad exposure to companies trading on more moderate multiples. Beneath the surface
are domestically focused financial businesses with solid balance sheets, attractive dividend yields
and operational leverage to any improvement in local growth conditions. We expect returns to be
driven by disciplined stock selection and income generation, offering steady real growth within a
diversified multi-asset portfolio.
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162 Profile’s Unit Trusts & Collective Investments March 2026