Kanaan BCI Balanced FoF
News
19 September
2017
Dear Mr. Van Tonder
(Jnr)
Your investment in terms of either
your voluntary contribution funds and/or your compulsory contribution funds (RA
/ LA), has grown for the first 2 weeks of September 2017, nett of all fees, with
1.07%. It is good news but not necessarily an indication of things to come. To
look at the short term growth or depreciation of an investment is any case only
of value to traders or gamblers not for long term investors.
So why do we mention it?
A few years ago we decided to invest
up to 25% of Kanaan BCI Balanced FoF portfolio in the top offshore unit trust
funds so as to protect the portfolio against Rand depreciation. If you have
been investing for the long term you can rest assure that the Rand has been
depreciating over the past 40 years more than 5% per annum against the USD, but
that didn’t happen in a straight line. The Rand is known as one of the world’s
most unpredictable currencies and can sometimes appreciate unpredictably, like
during 2016 just after Nene-Gate and in the face of the uncertainty of Brexit
and the election of Trump, when the Rand appreciated with more than 25%, which
was the main contributor to the horrible -8.69% your investment in Kanaan BCI
Balanced FoF depreciated during 2016.
Diversification into good quality
offshore funds, as we have in Allan Gray, Orbis, Old Mutual Global Equity, is
very important, but it can also work against you over the short term, but over
the long term it eventually works in your favour as we have been seeing over the
past few months.
Friendly
greetings
Andre Delport
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