Page 179 - Profile's Unit Trusts & Collective Investments - March 2026

Fund manager interviews Chapter 9

continued to make reasonable reform progress in 2025 which we believe provides a platform for
stronger GDP growth over 2026 and beyond. We are hopeful that the reform momentum continues
to accelerate in 2026.
S&P Global Ratings upgraded SA’s credit rating in November 2025, the first upgrade in 20
years. The upgrade will see the government pay less interest on debt which will provide the fiscal
space to continue reducing the debt levels. This followed shortly after the removal of South Africa
from the FATF Grey list in October 2025 after having been included in February 2023. Both these
developments will reduce the financial cost to conduct business in South Africa and should further
assist the country in moving towards becoming an attractive investment destination again.
In August 2025, the Department of Transport announced the approval of 11 third party train
operators to use the Transnet Rail Network. Traxtion, one of the approved companies, announced
a R3.4 billion purchase of 46 locomotives and wagons with the first units ready for operation within
12 months. This is a positive step in providing competitive logistics for the broader SA economy.
Transnet has continued to see an improvement in its rail and ports volumes and thus reducing
logistics costs for business.
The Visio BCI Balanced Fund had another strong year in 2025 when it gained +25.3% versus the
peer group average of +18.8% and its CPI + 5% target’s +8.5% return.
The key drivers of performance for the fund were both local and offshore equity and property, local
fixed income and local cash.
** the Visio BCI Global Equity Fund is a global mandate managed by the firm and used for part of
the offshore equity exposure in the Visio BCI Balanced Fund.
In terms of risk management, what methods or strategies are you able to use to protect your
clients’ investments?
Q4 of 2025 reinforced the importance of diversification and discipline as market leadership
broadened and macro risks re-emerged. Despite our cautious outlook around the US and mega
cap stocks, we continue to view AI as an epoch-defining technological revolution. Although, we are
broadening our exposure to emerging markets and non-tech US companies we continue to invest
in themes surrounding the “AI arms race” such as ongoing geopolitical tension, a rush for resource
security, and excess global liquidity. Put more simply: Gold, Copper and Energy Production. At year
end the fund had 6.1% in gold and 4.0% in PGMs.
With the growth and inflation risks around the world, the conflict in the Middle East and Ukraine
as well as the uncertainties around the US/China relationship, we remain cautious and most
critically, mindful of capital preservation. From a risk management perspective boring is good, and
of paramount importance is our continuous efforts to assess senior management teams’ abilities to
maneuver their businesses through these uncertain times in the interest of all stakeholders. We are
constantly testing our assumptions and evaluating portfolio weights to ensure that we do not expose
the funds to undue risks given how fluid local and offshore conditions are.
We can also raise cash, lowering equity exposure, to protect client capital. As times we will also
utilise market hedges in the form of puts to protect the portfolio in the event of a correction. These
can include S&P500 puts, Dow puts and Satrix SWIX or ALSI puts. In the fixed income space we
manage the interest rate risk through duration management and, when appropriate, include inflation
linked bonds which at times act as a good hedge and help in with capital preservation.

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?
Domestic Equities entered 2025 with expectations that strong growth would drive a rerating
and higher earnings. However, the first half of 2025 proved a difficult environment as Trump Tariffs
increased volatility amid uncertainty in domestic and global growth. Gold, PGMs and Technology
sectors have been the standout performers. We expect higher Precious Metals prices to be sustained
in 2026 which should translate into higher tax revenues, corporate earnings and employee earnings
acting as a catalysts for a broader SA Inc recovery.
Global markets navigated a challenging final quarter of 2025 marked by heightened macro
uncertainty, policy easing and shifting market leadership. While volatility increased, global

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