Too much news flow

Credo's Chief Investment Officer, Deon Gouws, recently spoke to Citywire about how the wealth management industry has changed during his career.

Click here to read the article.

@DeonGouws_Credo

July in review

July was another positive month for global equity markets, as the S&P 500 and the FTSE 100 were up 1.4% and 2.2% respectively, while the Euro STOXX 50 was largely unchanged. Crucially, July saw Boris Johnson win the Conservative leadership contest and replace Theresa May as Prime Minister of the UK. The pound came under pressure over the month, falling 3.8% against the US dollar and 2.2% against the euro, with Boris Johnson refusing to rule out the possibility of a no-deal Brexit and the Cabinet increasing preparations for such a scenario. The US Federal Reserve reduced the base interest rate by 25 basis points, which was the first interest rate cut in 11 years. Despite this, the yield on US 10-year bonds was largely unchanged, while the yield on UK and German 10-year bonds decreased by 22 and 11 points respectively.

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The right type of ownership

It can be argued that one of the downsides of being a publicly listed company is the relentless earnings reporting cycle which encourages a short-term approach by both company management and shareholders. The need to continually meet and beat expectations for growth can result in management taking decisions that are not in the long-term best interests of the company. Analysts can end up focusing on the next quarterly report and subsequently, companies can find themselves being penalised for investing in long-term projects when there is a short-term negative impact on earnings or cashflow. Often, this can create opportunities for...

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June in review

June saw global equity markets make positive ground, as the S&P 500, the Euro STOXX 50 and the FTSE 100 were all up 7.0%, 6.0% and 3.9% respectively. The Fed and ECB indicated that a monetary stimulus could be on the horizon as they were faced with weakening economic data. In the UK, headlines were dominated by the Conservative leadership battle which saw 10 candidates being whittled down to just two; the favourite, Boris Johnson, and the Secretary of State, Jeremy Hunt. Against this backdrop, the pound was up 0.5% against the US dollar but down 1.3% against the euro. The yield on US, UK and German 10-year bonds all nudged lower by 12, 5 and 13 basis points respectively. Brent crude oil rose 6% over the month as tensions between the US and Iran intensified after two oil tankers were attacked in the Strait of Hormuz.

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Credo publishes the "Cricket Season" edition of CREDONEWS

CREDONEWS #30

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Down but not out

Our investment strategy involves taking advantage of temporary divergences between share prices and intrinsic value. This necessitates a longer-term investment horizon than next quarter’s earnings and an ability to look past current industry trials and tribulations. Flutter Entertainment plc (“FLTR”), previously Paddy Power Betfair plc, is a sports betting and gaming business with core operations in the UK, Australia and more recently, the United States. Roughly 90% of profits are...

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Cheese, Wine & Whispering Death


To coincide with the ICC Cricket World Cup being held in England and Wales, Credo invited clients to an informal Cheese & Wine tasting at La Fromagerie in Marylebone in June 2019. Guests were entertained by Michael Holding, the well known British Jamaican cricket commentator and former cricketer. One of the fastest bowlers to have ever played test cricket, he was nicknamed “Whispering Death” due to his quiet approach to the bowling crease and was part of the fearsome West Indian pace battery that devastated batting line-ups throughout the world in the seventies and early eighties. Michael took part in a fascinating conversation with Roy Ettlinger (Credo CEO) and Deon Gouws (Credo CIO).

@DeonGouws_Credo
May in review

Global equity markets performed poorly in May, with all major indices down over the month. The S&P 500, FTSE 100, the Euro STOXX 50 and Nikkei 225 had negative returns of 6.4%, 2.9%, 5.1% and 7.4% respectively. May saw the trade war between the US and China intensify as the US increased tariffs on a further $200 billion of Chinese imports. President Trump also threatened to impose 5% tariffs on Mexican imports until Mexico contributes more to solving the migrant issue. Theresa May announced she is to step down as Prime Minister on 7th June after failing to get support for her Brexit. Pound sterling was down 3.2% against the US dollar and 2.8% against the euro. The yield on US, UK and German 10-year bonds decreased by 38, 30 and 22 basis points respectively, as investors moved into safer assets.

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Investing in turbulent times


Credo’s Financial Intermediary Seminar in London at The Ivy Soho Brasserie proved very popular with clients. Clients heard from several key speakers, including Credo’s CIO and Fund Managers. Topics included a global markets update, an overview of Credo’s Global Equity and Dynamic Funds, as well as Credo’s Wealth Platform.

Click here to download the full presentation.

Changing the narrative

Technological innovation is disrupting many industries and the media industry is no exception. For several years Disney has been seen by investors as an established player, defending itself from the changes in consumer viewing habits that new, more innovative players were driving. We wrote in August last year of our excitement about the new way Disney was tackling the challenge of not only surviving, but thriving, in the creative destruction of the transition from packaged content to streaming. Historically...

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April in review

Developed equity markets continued to rally in April, following on from a strong first quarter. The S&P 500, FTSE 100, Euro STOXX 50 and Nikkei 225 were all up 4.0%, 2.3%, 5.5% and 5.0% respectively. The environment during this time was characterised by accommodative central banks, strong US earnings, recovering Chinese growth and an improvement in US/China trade negotiations. With regards to Brexit, the EU granted the UK a flexible Brexit extension until 31 October 2019, delaying the threat of a no-deal Brexit; the pound sterling was unchanged against both the euro and US dollar. Brent crude oil was up 7.4% over the month as Trump decided not to renew waivers on US sanctions granted to some countries. In the fixed income market, the yield on US, UK and Germany 10-year bonds all increased 10, 19 and 8 basis points respectively.

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Investment Week features Jarrod Cahn

Jarrod Cahn, Fund Manager of Credo Global Equity, was featured in the latest edition of Investment Week’s Bull & Bear. He examines the benefits of a global mandate as well as highlighting the recent compelling opportunities in high-quality technology stocks.

Click here to read the article.

Click here to read the full publication.

Managing risk

You don’t get paid for taking risk, you get paid for creating value. Risk doesn’t disappear, but it can be managed. It can be avoided, accepted, reduced, or transferred. Commodity risks such as those in car, home and life insurance are well understood. These follow the “Law of Large Numbers” where something that isn’t at all predictable on an individual basis, becomes very predictable for large groups. In contrast, the risks involved in speciality insurance against events such as art theft and cyber-attacks are more esoteric. If you are selling cans of Coke, it is very easy to know what you have sold, and what profit you have made. Insurance is different. You are covering an unknown event in the future for...

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Investing in turbulent times

CREDO Client Seminar

Financial Intermediaries, please join us for a breakfast and discussion about Credo's investment philosophy. Deon Gouws (CIO), Rupert Silver (Dynamic Fund Manager) and Jarrod Cahn (Global Equity Fund Manager) will talk about Credo’s investment philosophy focusing on our value-based approach. Tuesday 21 May 2019 at The Ivy Soho Brasserie, London. Please contact your Relationship Manager should you wish to attend.

Why we sold Sainsbury’s

Citywire features Credo Global Equity Fund

Credo’s Equity Spotlight article on Sainsbury’s was featured in a recent edition of Citywire Wealth Manager. The article highlighted the strong outperformance of Credo’s flagship Global Equity Fund over the last 12 months.

Click here to read the article.

March in review

In the month that was supposed to see the UK leave the EU, but instead saw the Brexit deadline extended to the 12th April and the House of Commons gaining control of the Brexit process, European equity markets continued to shrug off the political uncertainty; the FTSE 100 was up 3.3%, while the Euro STOXX 50 was up 1.9%. The political and economic uncertainty surrounding the UK was a drag on the value of the pound sterling which fell 1.7% against the US dollar and 0.3% against the euro. In the US, the S&P 500 ended the month up 1.9%, despite weaker than expected jobs figures and the US yield curve inverting for the first time since the financial crisis. The yield on US, UK and German 10-year bonds all decreased by 31, 30 and 25 basis points respectively, as fears of a global slowdown started to re-surface once again.

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Credo publishes the "Brexit and beyond" edition of CREDONEWS

CREDONEWS #29

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Interview on Afrikaans radio

Last week, Deon Gouws (Chief Investment Officer at Credo) was interviewed by Moneyweb on South African radio program RSG Geldsake on the topic of how international investors view the country.

Those who understand Afrikaans can click here to listen to it.

@DeonGouws_Credo

Is bigger better?

Sainsbury’s is a food retailer with about 17% of the market share of all UK grocers. In 2016, the company bought Argos, a UK home and general merchandise retailer which operates both online and physical stores. As the domestic market opportunities have saturated, the big UK retailers like Tesco and Sainsbury’s have had to get creative to...

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Investment research from Credo featured in Barron’s

Investment research from Credo featured in Barron’s

An article written by Jason Spilkin (Co-Portfolio Manager of the Credo Global Equity Fund) has just been featured in the Barron’s column: View From The Buyside. Barron’s is one of the leading sources worldwide for financial news and in-depth investment analysis and commentary.

Click here to read the article.

February in review

Global equity markets continued to perform strongly in February, as progress was made with regards to US-China trade talks, averting a scheduled increase in tariffs by 1st March. US equity markets were also boosted by a relatively strong earnings season. All major equity indices made gains over the month, with the S&P 500, FTSE 100 and Nikkei 225 all up 3.2%, 2.3% and 3.0% respectively. Pound sterling increased 1.1% against the US dollar and 1.7% against the euro, as resistance against a no-deal Brexit, the perceived worst-case scenario for business, increased. In the fixed income markets, yield on US, UK and Germany 10-year bonds all increased 9, 8 and 3 basis points respectively. Brent crude oil increased 9.0%, as larger than expected production cuts from Saudi-Arabia restricted supply and as demand was boosted by the prospect of a truce of the trade war between the US and China.

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Holy guacamole

Chipotle Mexican Grill (CMG) is a fast-casual, Mexican restaurant chain in the United States, United Kingdom, Canada, Germany and France. McDonalds (MCD) was an investor from 1993 to 2006. During that time, CMG went from 16 locations to around 500. Today it has over 2,000. Sometimes making money is about “thinking inside the box”. Taking something that works well and doing it again in a similar market. Good management is largely on the edges, tweaking something that already works (the menu, the prices, the store layout). CMG has proven...

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Home is where the heart is…

Home is where the heart is…

Global investing is the topic of this quarter’s Collective Insight (supplement to South African business magazine Finweek).

Click here to read the contribution from Credo’s Deon Gouws (Chief Investment Officer) and Ainsley To (responsible for the firm’s Multi-Asset Portfolio offering).

Click here to read the full publication.

@DeonGouws_Credo

@AinsleyTo_Credo

Citywire features Credo Global Equity Fund

Citywire features Credo Global Equity Fund

Credo’s Equity Spotlight article on Prudential was highlighted in a recent edition of Citywire Wealth Manager. Jarrod Cahn, Manager of the Credo Global Equity Fund, analyses the globally diversified nature of the business and why we are happy to invest in the stock.

Click here to read the article.

January in review

January saw global equity markets make positive ground following recent weak performance. All major equity indices made gains over the month, with the S&P 500, FTSE 100 and Nikkei 225 up 8.0%, 3.6% and 3.8% respectively. Despite this turnaround, the same underlying geopolitical issues still seemed to persist. However, this time, added to the mix, was the US Government shutdown. As the 29th March approaches, progress with regards to Brexit was lacking. There was temporary optimism as MPs voted in favour of replacing the backstop, the insurance policy designed to avoid a hard border in Ireland in the event of a no deal. However, the EU seems adamant that there would be no change to the deal already agreed. Despite this gridlock, the pound rose 3.0% against the euro. Amongst other currencies, the pound rose 2.9% against the US dollar. In the fixed income market, the yield on US, UK and Germany 10-year bonds decreased 5, 6 and 9 basis points respectively.

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Collective Insight Round Table Discussion

Collective Insight Round Table Discussion I

Join Ainsley To, Research Analyst at Credo Wealth, and other senior investment professionals and thought leaders at a round table discussing finweek's Collective Insight supplement on the topic "Getting to Grips with Going Global", jointly organised by CFA Society South Africa and ABSIP (Association of Black Securities and Investment Professionals).

Click here for details and to attend the event.

Credo Wealth featured in Business Day article

Credo Wealth featured in Business Day article

On Friday last week, veteran investment writer Stephen Cranston was responsible for an article in leading South African financial publication Business Day, focusing on alternatives for investors when it comes to global diversification. We were proud to see that Credo Wealth was the first manager mentioned in this piece.

The first two paragraphs of the article were as follows:

"It is a good idea to remind ourselves why we invest in global assets. In the days before the relaxation of exchange controls the focus was simply on taking money out of the country in case of a national emergency. Few people cared about the returns they would receive, they just squirrelled away the unused portions of their travel allowances in low-yielding bank accounts.

But more sophisticated professional advisers have come onto the market and can offer multi-asset and multijurisdictional portfolios. I would say businesses such as Credo Wealth, Stonehage Fleming and Citadel offer a much better alternative than sticking your money in a NatWest savings account."

The full article is only available to subscribers to Business Day, and can be found here.

Life insurance goes on

Companies have nationalities just like people - even multi-nationals. Prudential is a British Multinational Life Insurance and Financial Services company headquartered in London. It was founded in 1848, with door-to-door salesmen selling insurance for as low as a penny a contract, to the working class. An army of collection agents became known as “the men from Pru”, and the company became as British as a pint at the local pub. However, the world changes. Prudential now has...

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Credo featured in Citywire Pub Club

Credo featured in Citywire Pub Club

Credo Dynamic Fund Managers Rupert Silver and Ben Newton joined Citywire journalists for an informal lunch to discuss the fund and recent developments at Credo. The pair teamed up in 2017 when the fund was launched and have produced impressive performance, despite recent market volatility.

Click here to read the article.

Another take on Brexit

Another take on Brexit

Following the appearance by Deon Gouws (Chief Investment Officer at Credo Wealth) on South African news channel ENCA, he was also interviewed on CNBC Africa, discussing the same topic

Click here to watch the clip.

@DeonGouws_Credo

Brexit - what next?

Credo CIO Deon Gouws interviewed by eNCA

Last night, British Prime Minister Theresa May’s controversial Brexit deal was rejected by an overwhelming majority in the UK parliament. Soon after, Deon Gouws (Chief Investment Officer at Credo Wealth) discussed the aftermath on South African news channel ENCA.

Click here to watch the interview.

@DeonGouws_Credo

December in review

December failed to provide the Christmas rally many investors were hoping for as major global equity markets made significant losses over the month. As has been the case for much of the preceding year, the usual themes of trade wars and the US Federal Reserve Bank increasing interest rates played a significant role in the continued sell-off. The S&P 500, FTSE 100 and Nikkei 225 ended the month down 9.0%, 3.5% and 10.3% respectively. In the UK, progress with regards to Brexit was minimal with political tussles at the forefront as the government was found in contempt of Parliament, and Theresa May survived a vote of no confidence. Pound sterling reflected the Brexit stalemate as it dropped 1.2% against the euro. Oil prices continued to decline, with Brent Crude oil down 9.5% over the month as increasing supply and a weaker global outlook continued to weigh on the market. In fixed income, yields on US and UK 10-year bonds decreased 30 and 9 basis points respectively as investors migrated towards safe haven assets.

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Living in interesting times

Living in interesting times

Investors have just been through a tumultuous few weeks, with December 2018 being the weakest month for the US and international markets in nearly a decade, only to be followed by a rapid bounce over the last couple of weeks.

Click here to read Deon Gouws' perspective.

@DeonGouws_Credo