LONG TERM INVESTMENTS
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 one particular hand, as well as the weak all round economic development functionality projected into a lacklustre corporate earnings outlook on the other. This isn't one of a kind to South Africa.A equivalent slowdown in other development markets which include Turkey is forecast as their central banks start to boost interest rates. Eventually, that is most likely to lead to an financial slowdown.Money flow oriented/value investors continue to method South African investments having a deep fundamental method plus a constructive outlook. Their concerns have resulted in their applying a higher discount to their investment thesis and ultimately searching for cheaper valuations to raise investments.Liquid, well-managed companies with well-understood equity stories are at the major in the add-on list.Amongst certain mining investors and many specialist mining funds, local mining has grow to be almost ?untouchable? as a result of the labour strife. Must the labour difficulties be resolved, the platinum group metals sector may when again come to be an appealing investment.Hedge funds, in distinct, continue to believe that neighborhood 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?Final year a great deal 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 real funds investors that were lengthy South African equities and bonds.But so far, this year has been somewhat diverse: portfolio flows in both bonds and equities happen to be disappointing. Because the start out with the year, there have already been only four days of optimistic inflow into the bond market place, totalling R1.5 billion (versus bond outflows of pretty much R7bn).The equity market has seen net outflow of about R1bn for the year to date and only six good days of inflow. In other words, what we're experiencing is the impact of a 6.eight % present account deficit inside the absence of portfolio inflows.Clearly the US dollar within a tapering environment as well as expectations regarding the potential near-term functionality of development markets usually and much more particularly issues over the perpetual labour problems are all combining to producefragile sentiment. That is accurate in respect of emerging market assets commonly and for the country. This means the opportunistic inflows that we would have anticipated in the previous are merely not materialising to assistance the currency,.Eventually, the ?shorts? look to be continuing to focus on nations that preserve significant present account deficits and are overly reliant on portfolio inflows as the primary supply of their financing.The ?early adopters? of a a lot more hawkish monetary policy stance (Brazil, India and Indonesia) have seen their currencies stabilise in the previous six weeks, whereas these viewed as continuing with real rates which are also low to attract or perhaps retain capital continue to weaken. South Africa?s price hike final week will have met some, although not all, of those expectations.In contrast to the central banks of other crucial emerging markets, the SA Reserve Bank established an inflation targeting framework in 2000. The framework has been productive in managing inflationary (and deflationary) stress, anchoring inflation expectations and supporting development in the previous 14 years. Hence, we anticipate the Reserve Bank to sustain its measured strategy to any additional rate action and focus on the inflation and growth outlook consistent with this framework.