STANLIB Asset Management webinar: Multi-Asset Investing for a Shifting Landscape

Nimble, style-agnostic approach

The STANLIB Multi-Asset team employs a nimble, style-agnostic investment approach that does not rely on a single investment style (like value, growth, or quality). This flexibility helps deliver more consistent outcomes for clients, with lower volatility.

The team's Investment decisions are guided by six lenses: economics, valuation, momentum, liquidity, volatility, and sentiment. Using these six discrete categories guides decisions on whether to buy, sell or wait. These six factors are currently delivering positive signals about the current environment and when combined with our scenario-based approach help us position on our tactical horizon for us to maintain a pro-growth or pro-risk stance in our portfolios.

Summarised outlook and key asset class views

Attractiveness of domestic and global equities

The team remains positive on both domestic and global equities, especially US equities, which are supported by a positive liquidity environment, capex growth and we think a margin environment that will improve over time.
The JSE All-Share Index has gained over 20% this year, mainly due to gold and platinum companies. However, caution is advised as sentiment may be over-optimistic given that mining companies are low on the quality spectrum and have priced a somewhat more elevated gold and platinum price. Some of our concerns are shorter term in nature but we think they are potentially open to bouts of profit taking.
US equities remain attractive, but diversification is encouraged.
Technology and AI are seen as key drivers of future returns, growth and efficiency.
Europe and the UK face political challenges; China is resilient but policy-driven. The Multi-Asset team has initiated positions in China, which is also expected to realise benefits from AI adoption including efficiencies, lower valuations, policy support and, in time, improving equity participation.
Emerging markets are recovering but lack strong momentum. High correlations between South African and broader emerging markets must be considered when building portfolios.

Considering other asset classes

South African fixed income offers above-inflation returns, but global fixed income risk is rising as interest rate curves are steepening. Duration considerations must be navigated amidst a market focusing on fiscal risks here and abroad.
The recent move by the South African Reserve Bank to target lower inflation makes domestic fixed income more attractive as yields are likely to remain higher given that rate cuts will likely be pushed out. Despite higher rates being unhelpful for South African growth, the benefits of lower inflation are clear for a fixed income investor. Bonds have performed and the real yield relative to target is attractive. The team is neutral on domestic fixed income for now.
South African listed property is becoming more attractive for portfolio diversification and reasonable valuations.
The US dollar remains expensive but is likely to weaken only modestly. As global investors diversify away from the dollar, assets like gold and cryptocurrencies are gaining interest as are EM currencies given the likely rates cuts in the US and as (most of) the rest of the world is further down their path of interest rate cuts.
Gold has been a long-term holding, but positions are being trimmed due to stretched sentiment and equity concentration.

Recap on the STANLIB Multi-Asset Cautious and Growth Funds

In early 2023, we transitioned all our balanced mandates to the current Multi-Asset team. The mandates and objectives stayed the same, but the approach and execution changed.

The result is a dynamically managed multi-asset solution that aims for consistent performance over the long term through skillful asset allocation, risk management and a style agnostic approach.