Cranes, planes, and rock and roll don't seem to quite fit into the world of hard-core investments, but you may already have them in your portfolio. What are they doing there?
Against a backdrop of lower returns for longer, asset managers have been forced to venture "off the beaten track" in search of alternative sources of returns, along with a greater focus on risk management, in constructing optimal, well-diversified portfolios.
We are living in challenging times and SA's GDP is expected to be even lower than the recently lowered global GDP forecasts. This is a difficult scenario for portfolio managers as lowered GDP forecasts translate to lower company earnings. The result? Lower future returns from traditional asset classes.
We expect the downward shift in returns relative to risk to be more pronounced in higher-risk assets (growth assets such as equity and listed property). Saying that, there is still a case for holding a substantial chunk of your portfolio in higher-risk assets.
If you look at the JSE's Top 40 companies on a bottom-up basis, and build up a forward P/E for these 40 stocks, you'll see a number of the Top 40 stocks are trading at a discount to fair...