FFM podcast ep8: Volatility for starters; SA Inc for mains; and Life for dessert
It's a volatile environment investment professionals find themselves in, summed up succinctly by this week's guests, Corion Capital's Garreth Montano and Grant Morris from CluclasGray Asset Management, hosted by BizNews' Stuart Lowman. One of the building blocks behind Fantasy Fund Manager was education, and the first eight weeks have certainly given users that and more, highlighting how difficult it can be to manage money. But despite the macro and micro headwinds SA incorporated is facing, that's where both see certain companies offering value. While Grant laid out a few sector plays with a particular focus on Life Healthcare, set your diaries for ⅞ July. We've also opened up a questions section, which you can write in by going to our Twitter handle @Fantasy_Fund, emailing danita@biznews.com, or visiting www.speakpipe.com/ffm and voicing a question. Remember to make your picks each week by the market open on Monday to have a chance to win any of the prizes up for grabs. And invite your friends. Register at www.fantasyfundmanager.co.za—thanks to our platinum sponsors Sharenet, Terebinth Capital, ClucasGray Asset Management, and Money Better. Remember to subscribe to the podcast so you don't miss an episode.
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The eighth episode of the Fantasy Fund Manager podcast saw the current state of volatile markets and the challenges faced by fund managers put under discussion. And despite the difficulties, there were some positive aspects, such as strengthening the rand and decreasing inflation.
Grant Morris, a portfolio manager at CluclasGray Asset Management, shared his focus on the healthcare and luxury goods sectors. He acknowledged the humbling experience of managing funds in the short term, emphasising the difficulty of predicting short-term movements in share prices. The podcast aimed to educate listeners about managing their own money and highlighted the challenges within the industry.
The hosts discussed the global market environment, including geopolitical concerns and the impact of events like the COVID-19 pandemic. Grant mentioned that central banks increasing interest rates to control inflation presented challenges for risk assets. However, he also noted that such environments could provide medium to long-term opportunities for investors.
Gareth expressed a constructive view regarding the South African market, mentioning that some assets were becoming appealing despite the prevailing negativity. Grant added that evaluating opportunities in South Africa required considering domestic-facing companies like retailers and banks, which had been affected by various issues. He believed that some of these issues would alleviate in the future, reflecting improved equity prices.
Grant mentioned stock opportunities, including ABSA, Standard Bank, Old Mutual, The Foschini Group, and Truworths. He also discussed an industrial business called Reunert, which he believed could benefit from the energy transition and renewable cycles.
Both Gareth and Grant advised investors not to be consumed by negativity and highlighted the relative cheapness of South African assets compared to global peers. They recommended picking up exposure and having a tilt towards these assets during extreme times.
Regarding investment approaches, Grant suggested looking into the healthcare sector, particularly mid-cap companies like Life Healthcare. He mentioned potential catalysts for the company, such as the approval of additional drug use for diagnosing Alzheimer's, which could positively impact its molecular imaging business.