NEWS & OPINION
31 December 2020
PROFILE
VERY BRIEFLY
TUMI LOATE INVESTMENT ANALYST, 36ONE ASSET MANAGEMENT
How did you get involved in financial services – was it something you always wanted to do?
After I did academic articles at Wits University, I was allocated to the Financial Services Division within KPMG to audit. I was involved in auditing two of the five largest banks in South Africa. I gained insight into the various aspects of a banking model – how one looks at credit risk, endowment impact, and the different complex financial products the banks are involved with. Naturally, when I arrived at 36ONE Asset Management, I started looking at the banking sector and managed to pick up other financial firms and insurers. As I love this sector, I was still keen to assess it, given that it is so crucial in determining the success of a nation’s economy.
What was your first investment – and do you still have it?
My first investment was a three-year structured product I entered into with Investec. The investment was linked to the FTSE 100 Index and was offering 10 times the return of any growth in the index, with a 75% capped geared return if the index was above 7.5%. The product seemed complicated, but I liked the fact that if the index was down, they would return 100% of the capital invested (provided the index did not fall below 40%) and I also liked the exposure to internationally diversified companies. The index was above 7.5% over the three years, and I managed to make a very good return for my first investment.
What have been your best – and worst – financial moments?
One of my best financial moments relates to shares that I purchased in Phuthuma Nathi, offering an underlying
investment in Multichoice South Africa (MCSA) to qualifying black investors in 2006. I bought the shares a few years ago at a price below R90 and have been collecting dividends ever since. Not only did I manage to collect an impressive dividend yield but have also seen good capital return performance. Multichoice, in the last two years, has also looked to unlock value for shareholders: they combined the PN1 and PN2 shares for greater liquidity, offered an additional 5% stake in MCSA for free, and offered shareholders an option to exchange 20% of their shares for JSE-listed Multichoice Group (to get Africa exposure). My worst financial moment relates to an investment in British American Tobacco shares. When I purchased the shares, I had just entered the investment industry and assumed the shares were cheap by looking at historic variables. The share plummeted in late 2018 when the US Food and Drug Administration considered a menthol ban, and ESG and sustainable issues became front of mind for investors.
What do you tell investors who are worried about their investments due to SA’s current economic environment and COVID-19?
Yes, there are issues relating to unemployment, state-owned enterprises and deep-rooted fiscal issues, but investors must be careful not to panic, as this can result in investment realisation at significantly low value. Investors should carry on holding local investments that will be defensive and able to continue grabbing market share in this environment. There should also be a healthy exposure to offshore assets. These asset values are not based on fundamentals in the local economy, and do not react to the devaluing rand currency. The increase in offshore exposure, though, should be done at an opportune time – not when the local market has already experienced a significant decline, or the currency has been hard hit. Regulation 28 also offers greater flexibility – it allows for a 10% allocation to alternatives such as hedge funds. These funds are able to produce positive returns in rising and falling equity markets and can be especially valuable during times of heightened uncertainty. These funds have retail offerings and can serve to reduce investment risk, contrary to numerous investor myths.
Fiduciary services specialist Sentinel International has announced that, after three highly productive years as the firm’s non-executive Director and Deputy Chairman, Simon Turner has Simon Turner been appointed CEO. Turner’s immense depth and breadth of expertise in assisting global and local corporates in formulating and delivering on complex strategic opportunities make him “a very welcomed leader of the Sentinel Group,” according to Sentinel’s Chairman, Christopher Beatty. “Simon has already had a tremendous impact on the way we view our business, and we’re extremely excited to see what the future holds.” Turner has 25 years’ experience across Europe, Africa and the Americas in building and managing businesses. He focuses primarily on growth (including acquisitions), turnarounds, restructuring, financing (equity & debt) and geographic expansion.
Hester van der Merwe CFP® is the FPI’s 2020 Financial Planner of the Year. The award is the highest accolade bestowed on financial planners in South Africa, and it represents the very pinnacle of Hester van der Merwe the profession. Van der Merwe, who has worked at Ultima Financial Planners since 2015, “set herself apart from the competition through the depth of her knowledge, the immense detail of her financial plans and her exceptional personal commitment to her clients,” the FPI says. Van der Merwe plans to use the platform to educate and inspire women from all walks of life – “whether it’s deciding to become a CFP®, or finally having the courage to take the bull by the horns in their own financial affairs, or even just asking to be included in the household’s financial planning process,” she says.
EARN YOUR CPD POINTS The FPI recognises the quality of the content of MoneyMarketing’s December 2020 issue and would like to reward its professional members with 1 verifiable CPD points/hours for reading the publication and gaining knowledge on relevant topics. For more information, visit our website at www.moneymarketing.co.za
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