SA Investment Strategy | Quarterly wrap Q219: Low beta SA outperforms EM buoyed by rand hedges
From an SA asset-allocation perspective, SA equities (Capped SWIX TR +2.9%) underperformed bonds (+3.7%) but outperformed cash (+1.8%) in Q219. We downgraded SA equities from Overweight to Neutral and upgraded SA Bonds to Overweight in early April'19. The ZAR (+2.9%) was the fourth best performing EM FX in 2Q19, with fed fund futures market pricing in a 100% probability of a Fed rate cut in July, and renewed hope of a trade deal. While Emerging Markets (-0.3%) continued to underperform the developed world (+3.3%) YTD and in Q2'19, low beta South African equities (MSCI SA ($) +4.2% in 2Q19) outperformed EM equities (MSCI EM ($) -0.3% in 2Q19) led by SA Resources.
Avior is a globally recognised capital markets research and trading firm, with the broadest research coverage within the region, with 100+ SA and 20+ SSA companies under coverage. Avior services clients from offices in London, Cape Town and Johannesburg.
Our research quality is consistently recognised in local and global surveys, with 18 analysts currently rated in their respective sectors (FM 2017). Value add through in-depth, innovative, high quality and consistent research with comprehensive underlying fundamental modelling supported by regular analyst and roadshow interactions.
Avior has proven that by working closely with our clients we can mutually develop dominant positions in certain sectors, going from strength to strength. Avior has a dedicated ESG team, having been ranked #1 in Corporate Governance research since 2008.
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