In September 2021, the average prudential balanced portfolio returned -0.4% (August 2021: 1.2%). The top performer is Allan Gray Nambibia Balanced Fund with 1.3%, while Hangala Prescient Absolute Balanced Fund with -1.9% takes the bottom spot. For the 3-months Old Mutual Pinnacle Profile Growth Fund takes the top spot, outperforming the ‘average’ by roughly 1.8%. Hangala Prescient Absolute Balanced Fund underperformed the ‘average’ by 2.4% on the other end of the scale. Note that these returns are before (gross of) asset management fees.

The Monthly Review of Portfolio Performance to 30 September 2021 provides a full review of portfolio performances and other insightful analyses.

Not being the top performer is not good enough!

The Benchmark Default portfolio is currently experiencing a difficult time, investors taking the fund to task for not featuring at the performance table’s top end.

Investing is like a sports game, whether it is soccer, rugby, hockey, or whatever, and the investor serves as the coach. His investment is his team; the opponents are the investment market. The coach may take one of two routes, a speculative route or a planned route. Taking the speculative course, the coach would attempt to capitalise on the opponent’s weakness as the game progresses, focusing on winning the game. The planned route requires the coach to know his opponents and his team and what result he wants to achieve. This knowledge will determine the strategy he must follow. He may not always want to win each game if that means preserving his team’s completeness, fitness, and health for the next game.

Investment is not a one-game matter but rather like winning the league. One can follow similar approaches when investing. The speculative course means that the investor tries to identify opportunities in the market and invest in these, focusing on making a killing on the investment. How one identifies opportunities is important. Laypeople would consider what has done well over the recent past and jump onto that band-wagon. Experts would use benchmarks for assessing whether an investment presents an opportunity. Often the benchmark considers the investment relative to other similar investments, the market, or the investment’s historical metrics. In a planned approach, the investor would define his ultimate goal and a strategy for achieving this goal…

Read part 6 of the Monthly Review of Portfolio Performance to 31 August 2021 to find out what our investment views are.