By Alec Hogg
The feature of today’s investment webinar for Biznews Premium subscribers was the continued contrast between the strong performance by our US portfolio and the locally focused SA Champions. Investments into portfolios is available via the bundles offering on EasyEquities.
Amazon and Microsoft continued to power ahead. And the switch from Alphabet into historically undervalued US banks JP Morgan and Morgan Stanley has thus made little difference.
These gains have been offset by the slide in the value of Alibaba and to a lesser extent Apple Inc, the decline in both counters blamed on the US/China trade war. My rather cynical view on this is that the war is being dragged out until it is settled at the most appropriate time for the Donald Trump re-election campaign.
So I’m not seeing it as a long-term or structural impediment, and would argue that on a year’s view both Apple and Alibaba now offer exceptional value.
The US exponential portfolio has risen 36% in Rand terms since it was launched in November 2017 – an annualised yield of 24%.
At the other end, the SA Champions has underperformed the static US stock market, losing 6.5% since its establishment, largely due to the shock reverse from Australia in the construction group Wilson Bayley Holmes; and the soggy performance of smaller SA companies to which the portfolio is exposed via the Ashburton midcap ETF.
In both instances, these counters offer excellent value right now. WBHO is poised to benefit from the promised rebound of the Ramaphosa-driven infrastructure investments; while midcaps have borne the brunt of the impact of Zumanomics on the economy, and are highly geared to a turnaround.