INVESTMENT GROWTH FUND
IFG is aligned with the new legislative environment and has implemented a standard financial planning and investment process to meet all the requirements in terms of the relevant laws. We recognise the need to measure our advice to clients according to a benchmark that sets the standard in the industry. Our benchmark of the "best advice" and offering "superior services" are the cornerstones of this process.
We ensure a high standard of financial planning within the company and provide the means to maintain that standard. Our in-house designed financial planning tools and modules make it possible to deliver a professional financial and investment planning service, backed by our excellent reporting processes. Through our para-legal team we provide financial planners with support on legal technical matters.
WHY IFG AFRICA?
We are a specialist equity team within IFG Africa Financial Investment Group and offer both sector-specific and general equity funds, predominantly within the South African market. We also offer Pan Africa funds to investors seeking exposure to the broader African continent.We invest in companies that are undervalued and demonstrate an ability to create shareholder value over time, and our investment approach gives us the ability to deliver competitive returns through different market style cycles. We do this by combining a fundamental, valuation-based approach with other proven investment factors such as quality and momentum.
While valuation has proven to be a vital ingredient to long-term outperformance, our research shows that the inclusion of other key variables adds a crucial dimension. The combination of valuation and these uncorrelated variables broadly grouped as Quality, Growth and Momentum, provides a more balanced approach to decision making, enhancing our ability to avoid ‘value traps’ and deliver competitive returns though different market cycles.
Entrepreneurship is about passion. Great entrepreneurs are not driven by a simple desire to make money. They are driven by a need to change the world. They may change the world by building a better operating system or a better search engine or a better social network. But whatever it is they are building, great entrepreneurs are driven by passion.
The same is true of IFG Africa.
It is not enough to simply hope to make a buck. The best Venture Capitalists fund companies about which they are truly passionate. Building great companies takes a long time. And it is never a straight path. But a shared desire to create something great "something important" will carry entrepreneurs and IFG Africa alike through the tough times, but more important to grow financial investemnts for our clients.
So, how do the offshore equity investors at present see South Africa?Growth/momentum institutional investors will be the least persuaded by the South African story. This reflects concerns in the weak and weakening rand on the 1 hand, and the weak all round economic growth functionality projected into a lacklustre corporate earnings outlook on the other. This is not exceptional to South Africa.A related slowdown in other growth markets like Turkey is forecast as their central banks start off to enhance rates of interest. Eventually, this is likely to result in an economic slowdown.Cash flow oriented/value investors continue to method South African investments having a deep fundamental strategy in addition to a constructive outlook. Their concerns have resulted in their applying a greater discount to their investment thesis and ultimately hunting for less expensive valuations to raise investments.Liquid, well-managed businesses with well-understood equity stories are at the leading in the add-on list.Amongst particular mining investors and quite a few specialist mining funds, local mining has become nearly ?untouchable? because of the labour strife. Really should the labour troubles be resolved, the platinum group metals sector may possibly as soon as again become an attractive investment.Hedge funds, in certain, continue to think that local banks are broadly exposed to unsecured lender credit pressures and that these will contaminate loan growth and non-performing loan ratios. This, in turn, will contaminate the earnings and return outlook.How do the offshore institutions see our currency?Last year loads of the outflow that pushed the rand weaker was a mixture of speculative interest within the context of a tapering environment, a reduction of overweight offshore bond positions and active ?overlay hedging? from genuine funds investors that have been long South African equities and bonds.But so far, this year has been somewhat unique: portfolio flows in each bonds and equities happen to be disappointing. Because the begin in the year, there happen to be only four days of optimistic inflow into the bond market place, totalling R1.5 billion (versus bond outflows of almost R7bn).The equity marketplace has observed net outflow of about R1bn for the year to date and only six good days of inflow. In other words, what we are experiencing may be the impact of a 6.8 % existing account deficit in the absence of portfolio inflows.Clearly the US dollar in a tapering environment as well as expectations concerning the possible near-term overall performance of development markets usually and much more specifically concerns over the perpetual labour troubles are all combining to producefragile sentiment. This is correct in respect of emerging industry assets commonly and for the country. This indicates the opportunistic inflows that we would have expected inside the past are merely not materialising to help the currency,.Eventually, the ?shorts? look to become continuing to concentrate on countries that retain substantial current account deficits and are overly reliant on portfolio inflows because the key supply of their financing.The ?early adopters? of a more hawkish monetary policy stance (Brazil, India and Indonesia) have observed their currencies stabilise inside the past six weeks, whereas those viewed as continuing with true prices that are too low to attract and even retain capital continue to weaken. South Africa?s rate hike final week will have met some, although not all, of these expectations.In contrast to the central banks of other important emerging markets, the SA Reserve Bank established an inflation targeting framework in 2000. The framework has been efficient in managing inflationary (and deflationary) stress, anchoring inflation expectations and supporting growth in the previous 14 years. Therefore, we anticipate the Reserve Bank to preserve its measured approach to any additional price action and concentrate on the inflation and development outlook consistent with this framework.