Covid-19 and your investments

By Nedgroup Investments

As 2020 came to close we saw a sharp V-shaped recovery in global equity markets after the immediate negative response to the Covid-19 pandemic.

Global equity markets finished the year strongly, and in positive territory. JSE ALSI was also slightly positive for the year.

We have updated our frequently asked questions to help you navigate the current environment, but it is important that you keep abreast of what is happening in the fund(s) in which you are invested. Subscribe to our monthly Pulse Report, read the latest factsheet(s), quarterly commentary and attend for our fund manager feedback webinars which are held on a quarterly basis.

Most importantly, if you have a financial planner, they should be your first port of call if you need advice on what to do with your investments. We are not authorised to give financial advice in any way.

Is Nedgroup Investments back at the office?

Our team is still working remotely but our operating hours remain from 08:00 to 17:00 (CAT) Mondays to Thursdays & 08:00 to 16:30 (CAT) on Fridays.

You can still transact and manage your account online 24 hours a day via the secure portal of our website or EVA, our electronic virtual assistant. If you do not have access to your investment account online, we encourage you to register for online access in order to manage your investments.  

What should I expect going forward in terms of volatility and returns on my investment?

This is always tough (impossible) to predict but depending on the product there will be some volatility. The markets are indicating less volatility than last year. Some influencers of this include the speed at which vaccines are distributed, their effectiveness, continued support from central banks, and any geopolitics between major economies (China, US etc).
Locally, a slow vaccine roll-out could mean a lag in the recovery of the South African economy relative to developed world economies.

Is my money safe? And should I continue putting money into the markets?

The old cliché remains, it?s about time in the market and not timing the market. The funds are under constant stewardship by the fund managers to enable the best outcome for our investors.

You can optimise your investment strategy by following these guidelines:
? Educate yourself on financial markets, asset classes and key investment principles.
? Develop a sound financial plan and focus on what you can control, for example:
  - your objectives,
  - your time horizon to achieve your objective,
  - the level of risk you need to accept, and
  - increasing your contribution.
? Employ experts to assist in your decision-making - discuss with financial advisor the nature, diversification and composition of products / unit trusts invested in, depending on your situation.
? Often controlling your expenditure of non-essential items or services through a well thought out budget can have a big impact on your wealth accumulation over time.
? Paying down expensive debt such as credit cards and store accounts and redirecting your spending on interest rates to investing instead, will see your invested capital steadily accumulate.

Should I switch or withdraw my investment?

Staying invested is a conscious action, as opposed to just doing nothing.

If you have chosen the correct investment for your long-term needs, switching funds or withdrawing from your investment now due to short term losses can adversely impact the likelihood of achieving your long-term goals. Focus on your long-term objectives rather than short term market movements and consult a financial planner to help you stay focused on a financial plan.

When will things get back to normal? And could the vaccine have an impact on the markets?

What is normal? The vaccine could assist in any ?normalisation? of markets, but as Yuval Harari may tell you, the world is too complex and dynamic with infinite variables to say with any certainty what the future holds.

What are the fund managers doing to manage the funds during these uncertain times?

The Nedgroup Investments Best of Breed? fund managers are ensuring that client portfolios receive their full attention and diligence during this period, so clients can rest assured that their investments are in good hands. The downturn does provide an attractive entry point to produce good future returns.

The fund managers have adequate Business Continuity Plans in place which have been implemented to ensure that they are fully operational, and that stewardship of all investor portfolios continues uninterrupted.

How does Nedgroup Investments select its investment managers?

In selecting fund managers, we perform in-depth qualitative analysis and due diligence to seek out the very best asset managers to partner with. There are several factors that guide our decision to select an investment manager, including the following:
? Managers who own a reasonable stake in the business
? Co-investment alongside clients and alignment of interests
? Sensible philosophy and process
? Differentiating and sustainable ?edge?
? Valuation driven
? Focus on capital preservation
? Stewardship culture
? Willing to close funds when necessary to protect alpha generation capability