Multi-Asset-ImageClick HERE to read the market update for December 2014 incorporating performance numbers for calendar 2014 with a brief summary below.

Click HERE to have a look at the summary of Investec Asset Management’s Global Multi Asset view point and investment themes for 2015, which I think makes for interesting reading.


Local Markets:

  • December saw Listed Property as the best performing asset class. Listed Property was also the best performing asset class for 2014.While The ALSI only managed to return 10.9% for the year compared to the 21.4% in 2013. SA Listed Property is now also the best performing asset class over and 3 and  5 year period.
  • The ALSI ended down 0.2% for December and the ALBI delivered -1.6% for the month as local bond yields increased, however the ALBI was still positive for the year, up 10.1%.
  • Mid-caps and small-caps delivered 19.6% and 20.6% respectively for calendar 2014.
  • Resources had another tough month returning -4.7% in December and -14.7% for the year compared to the 1.4% for 2013. The Financial sector was the best performing sector for 2014 returning 27.3% and was also the best performing sector for the 4th quarter returning 10.8%. Financials is the only sector to see positive returns for each quarter this year.
  • Resources have lost 6.5% over the five years to end 2014.
  • The ALSI closed slightly lower on 49 771 compared to its November closing price of 49 911.
  • SA Equities (ALSI) still look expensive at a trailing PE of 16.9x.
  • Foreigners were net sellers of our Equities and net buyers of our Bonds in December

Exchange Rates:

  • The Rand managed to depreciate against all 3 major currencies during 2014.
  • The Rand closed at R11.45  against the Dollar- weaker than the R11.04 in  November.
  • The Rand closed at  R14.42 against the Euro and R17.35 against the Sterling Pound. Closing price in November was R13.79 and R17.25 respectively.
  • Over the five years to end December 2014, the rand depreciated by 35.4% against the US dollar, 34% against the sterling and 25% against the Euro (pg. 10 attached)

Offshore Markets:

  • Looking at Global Equity Markets, the ALSI returned -0.2% for December compared with 0.5% for November and managed to outperform Emerging Markets (-1.0%). Developed markets had yet another great month returning 2.1% in December, slightly lower than the 2.2% in November (In Rand Terms).
  • In USD terms it was a tough month for markets. The S&P500 was the best performing market for 2014 returning 13.7%.
  • Despite a weaker rand against the US Dollar (-9.6%), the ALSI still managed 0.2% growth for 2014.

Economic Development:

  • Brazil was the only ‘Fragile 5’ country to increase rates. They increased their rates with 50bps- 4th increase for the year.

Commodity prices:

  • US$ Gold price increased slightly during December to $1 183. Closing price was $1 167/ounce for November.
  • Oil price decreased further from $ 73/barrel to $ 57/barrel at year end; a 50% drop from its 2014 high in June.
  • Platinum Rand price increased from R 13 267/ounce in November to R 13 843/ounce in December.

Credit:  Investec Asset Management