SPONSORED | PSGWealth For many investors, the past five years have delivered very disappointing real returns. Read more.
123RF/Preechar Bowonkitwanchaihave delivered very disappointing real returns. It has been a particularly abnormal period of asset class returns in SA, which saw conservative assets, specifically cash, significantly outperforming growth assets like equities and property.
This goes against what is traditionally expected – over the long term, riskier assets, specifically equity, is expected to garnish an equity premium and in doing so, significantly outperform cash.
Yet, the second graph shows that over the past five years, the risk-return relationship has inverted, with the least risky asset – cash – providing the highest return.Thus, funds with high SA growth asset exposure struggled, and multi-asset funds across the risk spectrum suffered due to this abnormal period of returns, despite often allocating as much as 30% to offshore assets, which have generally done well.
Additional optionality is provided on the upside should we see additional volume growth or re-ratings in domestic equities. PSG has a range of advisers who understand this complexity and they are qualified to take these instances into account when planning for your goals and dreams.
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