With the debate around the merits of active versus passive approaches to asset allocation continuing to rage, Smart Beta – an investment strategy that encompasses aspects of both these approaches in a cost-effective manner – is attracting increased attention amongst both global and local investment strategies.
National Treasury has released an update to South Africa’s retirement reform policies, with the proposal aiming to improve retirement conditions for all South Africans through the prescription of certain new requirements.
Why do we all fall down? Recently, one of us was asked this question by a four-year-old child after the umpteenth performance of 'Ring a ring a rosies'. Children have an ability to ask excellent questions that we often brush off or simply dismiss. Sometimes we become so accustomed to something that we fail to question why, or have forgotten why, we actually do it.
"A little learning is a dangerous thing
Drink deep, or taste not the Pierian spring:
There shallow draughts intoxicate the brain,
And drinking largely sobers us again"
Since many funds have on-going liabilities linked to inflation, a market value is assigned to these liabilities based on the yield at which inflation-linked bonds trade. A fall in the yield of inflation-linked bonds results in a higher market value of these liabilities and vice versa.
The South African inflation-linked bond market is now just over a decade old. Whilst being one of the most widely misunderstood asset classes, it is unquestionably one of the most crucial investment opportunities available. Our featured article seeks to debunk two of the more common myths associated with it.