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Feb 2021
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Dear client

1.      It may be a huge disappointment for one to compare the growth of the investment in Moriah Global since the 1st of January 2020 up to the end of August 2020, with a depreciation since August 2020 up to the end of December 2020, of 38%.

2.      One has to keep in mind, however, that the markets were out-of-the-ordinary volatile due to COVID-19 and as I explained, the Hedge fund managers of Moriah Global did very well until the end of August and the funds grew by 44% as you will see below, but we are still satisfied because the fund has still grown by 6.01% from 31 December 2019 to 31 December 2020, much better than any interest-bearing investment in South Africa that I am aware of.

3.      Below you can clearly see how Moriah Global has grown after all fees for the year during 2020, namely 6.01% although your investment has already grown fantastically from 1 January to 31 August by 44.04%.


  1. If you look at Moriah Global's history above you will see that the average return for someone who was patient, as mentioned was 11.7% per annum, with years that were very good like 2013 with 32% but also bad like during 2016 with -9%. However, over the long term the returns are still more than twice than that of our Stable SA fund which is like a Money Market account whose +/-7% per annum is fully taxable, i.e. A person whose tax rate is +/-25% would have earned only 5.2% after tax with an inflation rate between 4% and 6% in SA, which systematically reduces your Capital in real terms.

  2. We understand why this has happened to the underlying hedge funds of Moriah Global as we have explained, and we still believe that the underlying hedge funds are the best worldwide and that 2021 should be much less volatile with the rollout of the vaccine worldwide.

  3. However, we have been predicting the volatility of investments in Moriah Global for a year and a half, and although we still recommend that you keep the majority of your investments in Moriah Global, we recommend you as well as our retired clients to diversify in our other strategies, namely Stable Offshore, Stable SA, Global SA, Equity Offshore, Trading Offshore and Global Offshore, as explained in my previous letter.

  4. The fact that our Stable SA, has almost no ups and downs like growth funds, can cause a seductive peace of mind where many pensioners want to put all their eggs in one basket and as food, fuel and medicine becomes more expensive it causes them to have no money left over within 10 to 20 years. Stable Offshore also gives about 8% per annum, but it is much more valuable because it is in USD.

  5. The idea is that we transfer at least one year's income from Moriah Global to Stable Offshore, with a further one year's income to Stable SA from where you can draw your income. Our Stable SA aims to compete with South African savings accounts and money market rates, which have generally done well, again with +/- 7% after fees for 2020. See the two funds below.

     
  1. What we currently do with most of our clients who withdraw income from Moriah Global is that they transfer at least one year's income (per year is much more cost effective) from Moriah Global to Stable Offshore with another one year's income to Stable SA from where they draw their income. See the performance history of Stable Offshore and Stable SA. As mentioned before, we started with Stable Offshore and Stable SA about 2 years ago because the low interest rates that the bank pays you were shocking to us and as you can see below, we pay an average of almost 2 times more interest than the banks will give you, after all fees. 
  1. Below you will see that Global SA is also a high growth fund where we do not try to convert corrections to cash during market corrections but simply follow an approach of buy and hold and pensioners who will need their money within a year or two should not make use of Global SA, or Equities Offshore, because as Equities Offshore fell by -9% in February 2019, and by -12% in March, you will see that Global SA, despite Covid-19 and although it did 18% after fees for 2020, it can also be very volatile as shown during September and October 2020. Because we are not limited to a handful of growth funds in the case of Equities Offshore via Mauritius, we have even invested in excellent stocks such as Elon Musk's Tesla and Amazon and as you saw for 2020, did 41.73%. When one is in dire need of money from abroad and one has to give a calendar months’ notice, we still recommend even pensioners to invest part of their investments in the above-mentioned Global SA. Finally, we have now registered Dries's Trading Offshore fund in Mauritius via IAL after Dries invested his own money for the past year and a half in Arbitrage Trading as a trial run and has convinced us that he knows what he is doing. Although Trading Offshore is not an Arbitrage Trading fund, but pure Equities Trading, it is still based partially on his Arbitrage Trading methodology.

     

  2. If you still live in South Africa, we advise that you invest also in our Global SA fund which is similar to the Equities Offshore but of course not nearly as good because one is limited to only a handful of locally registered offshore funds, but as you can see, for 2020 the fund has performed 18.83% in ZAR after fees.

Friendly greeting,

Andre Delport

 

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