20 Feb 2013
Destiny Umbrella Retirement Funds - Performance Excellence
In the words of Tony Gibson, a founder member of Coronation Fund Managers “It is hard to imagine that it is now more than four years since investment markets were transformed into a world of elevated risk awareness - following the negative forces unleashed by the bursting of the credit bubble in 2008.”
2012 proved yet again to be a year in which investors experienced many bumps and bruises as the mood swing within most markets continued. Any good news, whilst causing some positive reaction in markets was in most cases treated with distrust and scepticism.
We are in agreement with the defensive and protective mindset that the aftermath of the credit bubble has created and note that it will be felt for a long period of time. History suggests a minimum of ten years is necessary for debt levels to normalise following such a massive debt overhang in the countries concerned and 2013 is possibly only a halfway mark in dealing with the aftermath of the credit bubble.
A key measure worthy of mentioning is that local equities have managed an impressive return for the year. The industry is of the opinion that this is a consequence of the lack of attractive alternative investments. In an environment of low interest rates it stands to reason that equities, paying dividends in excess of the long-term Government interest rate, must ultimately attract buyers.
For the year to 31 January 2013, the JSE All Share Index has proved to be a valuable investment and the selection of the Dibanisa - FTSE/JSE Shareholder Weighted Index (SWIX) Top 40 has not only produced a superb return but has also helped to reduce costs.
Destiny’s active equity managers, Allan Gray, Coronation and Foord, have also thrived in this environment, contributing considerably to the overall growth of the fund.
Taking the above into consideration, the Destiny Portfolios produced returns well above inflation for the period as can be seen by the returns hereunder. The returns have been generated by prudent asset allocation, smart asset manager selection and the correct blending of active and passive managers.
The Money Market Portfolio returned 8.25% compared to the Short-term Fixed Interest Composite Index which returned 7.37%.
GIB and the Board of Trustees are delighted to announce that the Destiny Market Enhanced Portfolio will be launched in March 2013. It has been specifically designed for members who are young enough to take investment risks or who have the financial ability to take investment risks.