Step in, and out

Never be a forced buyer. Never be a forced seller. Patience, the ability to walk away, and the behavioural intelligence of learning to pick your battles, is rewarded over the long term. Commodities are the simplest, and clearest, example of the dance of supply and demand. Commodities like oil don’t change. The businesses around them do, as they respond to the needs of people and other businesses. Price is not an indication of permanent intrinsic value. Price is a clearing mechanism. The more supply there is of something, without more demand, the lower the price will be. The more demand there is, without more supply, the higher the price will be. If you are able to...

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April in review

April was a positive month for major developed market indices, with some recovering significantly from losses captured during the first quarter. The UK’s first-quarter GDP estimate came in lower than expected at 0.1%, and subsequent moves in interest rate futures implied lower expectations for rates. The country’s currency fell to 1.38 sterling per US dollar and the FTSE 100 finished the period up 6.8%. Across the pond, President Trump’s focus on denuclearisation has thrown uncertainty on the future of the Iran nuclear deal, with his approach conflicting with those of his European counterparts. The S&P 500 made a muted gain of 0.4%, while the Euro STOXX 50 rose 6.0%. In fixed income, the 10-year yields for US treasuries, UK gilts and German bunds ended the period on 3.0%, 1.4% and 0.6% respectively, against a backdrop of continued tightening by the Federal Reserve.

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Best Ideas Portfolio   Dividend Growth Portfolio   Multi-Asset Portfolios 20/80   Multi-Asset Portfolios 45/55   Multi-Asset Portfolios 60/40   Multi-Asset Portfolios 70/30
Bigger is not always better

At university we learn that stock markets are efficient pricing mechanisms. That being the case, investors should appropriately value sprawling conglomerates on the basis of the sum of their individual businesses (often disparate). There should be little upside from splitting up or merging businesses. In the real world, there are measurable benefits to merging businesses i.e. in pounds and pence on projected financial statements. These benefits, called “synergies”, typically...

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The FSCA has approved the Credo Funds

Credo Wealth is pleased to announce that the Financial Sector Conduct Authority (formerly the Financial Services Board) of South Africa has approved our three unit trusts in terms of Section 65 of CISCA, 2002. In addition to the FSCA approval, the Credo funds are also UCITS compliant.

Credo Funds

Click here to access our Funds website and contact your Relationship Manager should you require any further information.

March in review

March saw equities extend February’s decline, resulting in most indices posting negative returns for the quarter. In the US, the planned introduction of tariffs targeted at Chinese trade provoked a retaliation, with China suggesting it will implement similar tariffs on primarily US imported goods. The S&P 500 finished the month 2.5% lower, while the Shenzhen CSI 300 fell 3.1%. Elsewhere, the UK made a number of concessions in coming to a 21-month transition deal with the EU. This included an agreement requiring Northern Ireland to comply with EU regulations in absence of a better alternative. Despite this, the FTSE 100 declined 2.0% while the EURO STOXX 50 fell 2.1%. In fixed income, the 10-year yields for US treasuries, UK gilts and German bunds ended the period on 2.7%, 1.4% and 0.5% respectively.

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Best Ideas Portfolio   Dividend Growth Portfolio   Multi-Asset Portfolios 20/80   Multi-Asset Portfolios 45/55   Multi-Asset Portfolios 60/40   Multi-Asset Portfolios 70/30
Version 6 of MyCredo is released

This new version includes functional enhancements for users, implementation of a data warehouse that will make future technology changes faster and more.

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A value-based approach


In this special edition of the Credo Equity Spotlight, Deon Gouws, CIO at Credo, discusses Credo's Investment Philosophy, focusing on our value-based approach. He further discusses why Value works over the longer term, whilst highlighting the challenges value investors have had over the last few years, particularly against competing investment styles, like Momentum and Growth. In the second half of the Spotlight, Jarrod Cahn, Director at Credo, drills down on two stocks Credo presently owns in its portfolios, highlighting some of the characteristics we look for in value stocks, and commenting on them.

Credo publishes the "20th Anniversary" edition of CREDONEWS

CREDONEWS #27

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Credo expands wealth platform to include offshore custody

The offshore custody solution allows clients access to global multi-asset class investments and multi-currency trading to a segregated custody service, all available via Credo’s single integrated platform.

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February in review

February saw global equity indices tumble, as investor fear (as measured by the VIX index) hit its highest level since China’s stock market crash in August 2015. In the US, the S&P 500 fell 3.7%. This during a month where new Federal Reserve chair Jerome Powell attended his first congressional hearings. In Europe, the UK’s FTSE 100 finished 3.4% down, while the Euro STOXX 50 fell 4.6%. In Asia, the Shenzhen CSI 300 was down 5.9% as President Xi moved to scrap term limits, opening up the possibility he may rule indefinitely. In fixed income, the major 10-year sovereign yields remained relatively unchanged as US treasuries, UK gilts and German bunds finished 2.9%, 1.5% and 0.7% respectively.

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Best Ideas Portfolio   Dividend Growth Portfolio   Multi-Asset Portfolios 20/80   Multi-Asset Portfolios 45/55   Multi-Asset Portfolios 60/40   Multi-Asset Portfolios 70/30
Great unknowns: what worries our clients

Benjamin Newton

In an article in Citywire Wealth Manager this month, Ben Newton an Investment Manager at Credo, notes the political and valuation risks that are currently forefront of our clients concerns.

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CNBC Africa interviews Credo CIO Deon Gouws

CNBC Africa interviews Credo CIO Deon Gouws

The much awaited announcement of incoming South African President Cyril Ramaphosa’s first cabinet was made on Monday night. CNBC Africa interviewed Credo CIO Deon Gouws in this regard.

Click here to watch the clip.

@DeonGouws_Credo

Pirates Half Marathon

One of the oldest and toughest road running events on the South African race calendar took place on Sunday the 18th of February 2018: the 41st running of the Pirates Half Marathon, proudly sponsored for the third consecutive year by Credo Wealth. The event attracted a record field of some 4,200 runners and was a tremendous success all round.


Pirates 21K 2017 A brief selection of photographs taken on the day.

@DeonGouws_Credo

Margin and opportunity

As long-term investors looking at the fundamentals of a company, we analyse what the intrinsic value of a business is. This is not a single number, but a range of scenarios. Any models created are questions rather than answers. A key focus is getting an idea of what ‘normal’ earnings are. Two competing issues in working out ‘normal’, are the dynamism of the market and mean-reversion. History is full of examples of companies that were doing very well, and then they weren’t. Before cars, makers of...

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January in review

January saw mixed returns across global equity markets. In the US, the S&P 500 had a strong month as it rose 5.7%. This was during a month where Federal Reserve chair Janet Yellen held her final meeting before she hands over to successor Jerome Powell in early February. In contrast, the broad index for UK stocks - the FTSE All Share - fell 1.9% as pound sterling strengthened against all major trading partners, rising 5.0% relative to the US dollar and 1.5% relative to the euro. Elsewhere in Europe, the Euro STOXX 50 rose 3.1%. In fixed income, following a year that saw a significant flattening of the US yield curve, 2018 began with a slight steepening and increase in level as rates across the maturity spectrum rose. Focusing on 10-year rates, US Treasuries finished the month at 2.7%, while UK Gilts and German Bunds rose to 1.5% and 0.7% respectively.

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Understanding the Trade Blotter - Part 1

MyCredo Tip

Want to see detailed information regarding an order on the “Blotter”? MyCredo allows you to check the order details of your trade.

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Flexing to grow

As Equity Investors, we are a step away from where decisions are made and implemented. Shareholders own a slice of the business, but the business is run on our behalf. Ideally, we get a great management team, who build up a track record of reacting well to whatever complexity, uncertainty, and ambiguity gets thrown their way. In that way, when evaluating a business, we are able to look at what ‘normal earnings’ are. Then when there are challenging periods, and short-term investors make their decisions based on the next few quarters, buying opportunities present themselves. Merlin Entertainments is the second largest...

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December in review

2017 drew to a close with mixed returns across equity regions. December saw a 1.1% rise in the S&P 500, in a month where President Trump signed US tax reforms into law. In contrast, markets across continental Europe were down over the period, with the CAC 40 and DAX falling -0.9% and -0.8% respectively. UK equities saw the largest rise, with the FTSE 100 increasing 5.0%, despite the government losing a vote that required any Brexit deal to be approved through a full parliamentary vote. Having flirted with the 2% level earlier in the late summer, US 10 year bond yields ended the year where they began, at 2.4%. This masked a continued flattening of the US yield curve, as 2 year interest rates reached 1.9%, a significant rise from their 1.2% level in January.

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Best Ideas Portfolio   Dividend Growth Portfolio   Multi-Asset Portfolios 20/80   Multi-Asset Portfolios 45/55   Multi-Asset Portfolios 60/40   Multi-Asset Portfolios 70/30