The Navigator is Anchor’s quarterly review of the major themes affecting markets and gives an overview of our current strategy and asset allocation. Click here for the full document.
The Navigator provides our clients with insight into Anchor’s thoughts on various asset classes and our near-term market outlook.
In 2Q25, investors had every reason to reduce risk as tariff and Government of National Unity (GNU) fears gripped markets. Over the three months, we also saw a major escalation in the Middle East conflict. Against this backdrop, it was patient investors who waited this out that have emerged as winners, with financial markets reaching new highs. Perhaps this sums up our view that asset allocation is an imperfect science and that the secret to investing is time, patience and a strategic plan. Risk assets have been rewarding, and we are optimistic that healthy investment returns are still to be made.
You will see in this document that although volatility is likely to remain higher than in the past, we anticipate earnings growth to remain robust. We also expect the US interest rate cutting cycle to begin, quite potentially adding further support to investors’ risk appetite.
We are proponents of alternative assets (including hedge funds, protected equity structured products, physical property, etc.) with better defensive characteristics during volatile periods. This is a new asset class for most South Africans, even though it commands a significant share of the investment wallet for family offices abroad. We expect most domestic investors to benefit by increasing their exposure to this asset class over time.
Anchor is a proponent of balanced portfolios and diversified risks. We believe it is crucial for investors to have a long-term plan for what they seek to achieve with their investments. This strategic approach will likely see them move towards their eventual desired outcome. In our view, this is an excellent time to take a pro-risk stance in your portfolio. We advocate that a healthy portion of your investment portfolio should be offshore to leverage diverse opportunities and return profiles while mitigating SA-specific risk. We think the current rand vs US dollar exchange rate is at a reasonable level to externalise a portion of your portfolio.
The key to successfully managing your wealth is understanding the changes to the world in which we live and adjusting (when necessary) your investment portfolios accordingly. As a boutique asset manager, we can more readily navigate these twists and turns of global developments. Our team of experienced investment professionals is ideally suited to understanding and reacting to a rapidly changing environment as we pursue exceptional investment outcomes for our clients.
