The quarterly newsletter from PSG Asset Management.
In this edition, we take a closer look at the prevailing narratives around risk. While deeply anomalous market conditions continue, many market participants overlook the attractive rewards on offer from the unloved areas of the market in the meantime. Once these returns are taken into account, we believe the risk/return calculations shift in favour of seeking out these unpopular sectors of the markets.
Reassessing the risk narrative
There is always some risk to investment – that is, after all, why investors demand a return for parting with their money. As custodians of our clients’ capital, we aim to minimise these risks and help our clients build wealth in the long run by investing in companies of above-average quality at below-average prices. ... Read more
An alternative view of risk
What is safe and what is risky?
At current multiples and yields, we believe the consensus ‘safe’ assets are actually very risky destinations for capital. In addition, extrapolating past economic trends may be a very poor guide to what lies ahead, especially regarding inflation, interest rates and currencies. ... Read more
Being paid to wait
Dividends provide an underpin for attractive future returns from unloved companies
During the 2020 market sell-off, traditionally high dividend paying companies globally faced a particularly severe sell-off as the dividend underpin evaporated. South African smaller cap value shares, the most unloved part of an unloved market within an unloved investing style, were particularly hard hit. ...
Fixed income investors can benefit from South Africa’s distorted and steep yield curve
A distorted yield curve offers investors access to potentially equity-like returns
Fixed income markets have been through a tumultuous year. The rate cuts associated with efforts to contain the economic fall-out of the Covid-19 pandemic, together with worries about South Africa’s fiscal position and investor preference for low-risk options, have driven distortions in the local yield curve. ... Read more
Portfolio Holdings as at 31 December 2020
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Performance to 31 December 2020
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Unit trust summary
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PSG Angles and Perspectives: Q4 2020 (pdf)
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Archive of previous editions
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