Investment performance is mostly linked to the rate of
inflation (CPI). Real growth above CPI is essential in the
protection and growth of capital. At FIRSTGLOBAL we
acknowledge this reality as one of our key challenges to
continue our quest for optimising returns.
The performance of any investment portfolio is
determined by the following:
Asset allocation
The exposure lent to different asset classes (Cash,
Bonds, Equities, Property or Derivatives). As these asset
classes move in different cycles, skillful allocation and
management among these asset classes are of
paramount importance to achieve better performance.
Quality management
Proper processes, experience, knowledge and
information are key ingredients for adopting a sound
strategy and managing funds accordingly.
Risk management
Any successful investment strategy must have proper risk
management procedures in place to protect the
downside of investment performance. Higher
performance is usually associated with higher risk.
Taxation
Taxable investors must seek, where applicable, to
optimise after-tax returns. This requires the skillful use
of tax friendly instruments and structures.
Currency exposure
Rand hedging is essential to protect an investment
against the volatility and potential future weakness of
the South African currency.
Costs
The level of costs has a direct impact on investment
growth. Returns must therefore be assessed on a
“net of fees” basis. Value must be added in relation to
fees charged.
Global Economy
The economies in which we invest underpin all of the
above strategies. In order to identify opportunities and to
avoid unnecessary risks, thorough research, insight and
vision are required to determine the best allocations
between geographical regions, asset classes and sectors.