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PSG Angles and Perspectives: Q2 2019

24 July 2019

PSG Angles and Perspectives: Q2 2019

The quarterly newsletter from PSG Asset Management.

In this edition, we consider the importance of clear and considered decision-making in tough times. We reflect on the emotional biases ingrained in individual and professional investors alike – and how they can throw a solid strategy off course if left unchecked. We also set out our principles for tackling difficult decisions and explain outcomes from our investment process that may at first seem counterintuitive: why we are deploying cash into a global ‘bull market’, and our preference for Japan over China as a fertile hunting ground for strong long-term returns.


Tough market conditions can make for difficult investment decisions
A prolonged period of poor performance from the local market – which, in some cases, has affected short-term returns from fund managers – has left many investors anxious and frustrated. While most of us understand the importance of taking a long-term view, it’s usually more difficult than we anticipate to put this into practice. ... Read more

How do you know when to sell an underperforming stock (or unit trust)?

Investment decisions by fund managers and stock investors are similar
We believe that the principles behind when to buy or sell a stock and when to buy or sell a fund are similar, requiring the same framework for making good decisions that put the odds in the investor’s favour. In both instances, the objective is rational decision-making. This requires carefully considering the impact of emotions on our behaviour as investors. ... Read more

Why we are deploying cash into a ‘bull market’

Our funds’ global equity exposures have increased, despite high overall market valuations
In early 2018, we raised the cash holdings in our global funds to record levels after we became increasingly cautious about the available opportunities at the time. We have since increased equity exposures significantly, allocating money to what we deem to be attractive opportunities. With several major stock markets around the world trading near record levels, clients may rightly ask why. ... Read more

China versus Japan: historic growth or future returns?

Strong historic growth in GDP can be misleading for investors
We are often asked why we are not investing in China: our funds have little direct exposure to the Chinese economy but in contrast, substantial exposure to Japan. Many clients have read about China’s strong growth in GDP over the past 20 years. A natural assumption is that growth is likely to be sustained in future. This, in turn, is expected to lead to high returns for equity investors. We question both these assumptions. ... Read more

Portfolio Holdings as at 30 June 2019

  • Click here to view the portfolio holdings of the funds as at 30 June 2019

Performance to 30 June 2019

  • Click here to view the performance of the funds to 30 June 2019

Unit trust summary

  • Click here to view the unit trust summary of the funds as at 30 June 2019

PSG Angles and Perspectives: Q2 2019 (pdf)

  • Click here to view the full document in PDF

Archive of previous editions

  • Click here to view previous editions

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