Webinar – Where the Money will be Made 4Q25

Anchor CEO and Co-CIO Peter Armitage introduced and hosted the webinar, unpacking Anchor’s recommendations for the various asset classes in 4Q25 and his views on global equities. Global equities remain in a three-year bull market, supported by solid fundamentals and an expected 8% US dollar return over the next 12 months. However, with the S&P 500 trading at 23x forward earnings, valuations are stretched, and some market de-rating is likely. Still, global growth continues to hold up, aided by solid US employment, easing rates, and AI-driven investment. Anchor remains constructive on global equities, while favouring selective exposure and diversification through alternatives like private equity, private debt, and hedge funds.

Anchor Fund Manager Liam Hechter outlined the exceptional performance of SA equities in 2025, with the FTSE/JSE Capped SWIX up 31% and the MSCI SA Index up 43% in US dollar terms. Over five years, the JSE’s 112.5% gain has nearly matched the S&P 500’s 114% return, underscoring its resilience despite local challenges. Robust corporate balance sheets, disciplined capital use, and offshore earnings have buoyed sentiment. This year’s gains were driven by precious metals, telecoms, and Naspers/Prosus, supported by renewed foreign inflows. Looking ahead, Anchor sees c. 10% upside for SA equities, favouring banks, retailers, and other undervalued local sectors within balanced portfolios.

Anchor Fund Manager David Gibb explored the accelerating AI capital expenditure cycle and its far-reaching investment implications. He described the current surge in AI spending by Big Tech as part of the “installation phase” of a new technological revolution—rich with opportunity, albeit marked by volatility. David highlighted rising vendor-backed financing and growing market concentration risks as key themes shaping this cycle. His insights offered valuable guidance for investors seeking exposure to the long-term structural winners of the AI era.

Anchor Co-CIO and Head of Fixed Income Nolan Wapenaar discussed US economic trends and the implications for SA. He expects two more US rate cuts this year, favouring shorter-duration bonds and cash-like assets, while cautioning against longer-dated US bonds. Domestically, longer-term SA bonds remain attractive, supported by debt and growth dynamics, with potential upside if the SARB adopts a 3% inflation target. SA bonds could deliver c. 9% returns, with the Anchor BCI Flexible Income Fund positioned to benefit ahead of further rate cuts. Nolan highlighted that US dollar strength is easing, and the rand may strengthen toward R17.00/US$1 over the next year.