Introduction - Angles & Perspectives Q3 2024

Introduction - Angles & Perspectives Q3 2024

PSG Asset Management is a price-sensitive investor that aims to identify underappreciated quality assets trading at a discount to fair value. While few investors would intentionally opt to overpay for assets, remaining objective amidst market noise is challenging. Moreover, it is easy to capitulate to sentiment and the popular narrative, especially when markets are in the grips of a prolonged momentum-driven run. This is why a disciplined and proven investment process is key. What sets our 3M investment process apart, is its focus on only selecting quality assets that are also trading at below their intrinsic value. By patiently and consistently applying this process, we are able to construct robust portfolios that provide valuable diversification benefits to our clients and strengthen their client solutions.

This edition looks more closely at the importance of price, not as an abstract concept, but in the context of current market conditions. It also explains in more detail how we think about the appropriate price to pay for an asset, and showcases the level of thinking we engage in when weighing up competing investment opportunities.

In the first article, Head of Research Kevin Cousins highlights that the market is not always consistent in how it assesses and prices geopolitical risk. Investors are right to demand a risk premium for holding assets that may be subject to geopolitical turmoil. However, in many cases only a superficial assessment of risk is applied, which may fail in providing true investor protection. Read more about our thinking about the risk of investing in China, in China: geopolitical risk and your portfolio.

Next, Fund Manager Mikhail Motala provides more insight into why the recent scramble into SA Inc shares may not provide investors with the best opportunity to benefit from a recovery in the local economy. In the article SA Inc under the microscope, he highlights how our philosophy often leads us to invest into overlooked and unloved sectors of the market ahead of the curve, and explains why, despite the recent run-up in local share prices, we remain optimistic on the outlook for selected local shares.

In the final article, Fund Manager Philipp Wörz discusses the divergence we have seen in global equity markets over the past year, with some are as being characterised by high levels of greed and others by extreme levels of fear. In Positioning global portfolios for the next generation of opportunities, he unpacks how our portfolios are constructed by looking beyond the popular areas and highlights that this adds valuable diversification benefits to client portfolios.

We trust that you will find these articles insightful, and their guidance valuable in these turbulent times.