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SA’s simplest performing fund manager Piet Viljoen on what’s hot and what’s no longer in 2022

Piet Viljoen’s Counterpoint fee fund has been the excellent performing native fund over the final phrase 5 years, managing to invent a compound annual return of a shade below 15%. Here is an unparalleled success, especially against a backdrop that hasn’t always been conducive to his funding vogue, which is fee centered. The interview concentrates on two subject matters; the delisting trend that faces the native bourse and legacy-afflicted Steinhoff. Piet, who has listed firms himself, says the burdensome regulatory and accounting requirements outweigh the advantages of being listed on an alternate. He provides that traders may possibly possibly possibly be getting reasonably livid referring to Steinhoff’s R25bn valuation, as no matter the extra transparent facet road to restoration, it aloof faces rather just a few no longer easy headwinds. – Justin Rowe-Roberts

Piet Viljoen on whether or no longer traders own to mood their return expectations in 2022:

Query, I’m aloof optimistic about returns accessible from rising markets in fashioned, non-Asian primarily primarily based rising markets. Markets cherish Russia, South American, Latin American and South Africa particularly and there are most of those markets that are aloof site beautiful. It’s rather easy. What sets the bar for long-period of time returns for markets are hobby charges. So, when you observe on the hobby charges in Russia, Mexico, South Africa and Brazil, they are all between 8% and 12%. That’s what you’re working with and equities may possibly possibly additionally simply aloof provide you with one thing in way over that over time. These markets are smartly positioned, where I would ought to mood my expectations spherical returns extra within the developed markets in Europe and the US, where bond yields are detrimental or zero because that sets the bar rather low. Because very low hobby charges in those markets, equities own been priced rather highly because on the reside of the day, the cash flows to the equity house owners of the alternate are sure by discounting your entire future earnings, by the hobby rate and, if hobby charges are very low, the latest fee sum is a tall number and that is the rationale what has took intention to those equities. I don’t deem there’s room for one to demand inconceivable outsized returns from those markets over the next three to 5 years. 

On the reasons for the delisting trend on the JSE:

I deem there are several components at work right here. Amount 1, from a regulatory point of observe – by compliance and accounting requirements – it has change into burdensome to be listed wherever on this planet, no longer simplest South Africa. The foundations and regulations own change into very laborious. The accounting requirements own change into virtually ridiculous when you observe at what they effect you produce for the time being with regard to beautiful fee accounting and all those styles of things. That is the one site of pressures listed firms face. So, we’re seeing extra and extra delistings globally. The second, a will ought to own part, is that many of the cash is flowing into index funds and all those funds produce is bewitch the huge firms, so smaller firms collect completely omitted. In case you produce a puny-cap listing, you collect no traction because the index funds are actual no longer attracted to procuring puny firms. Furthermore, within the asset management alternate up to quite lately, cash has been flowing to the huge fund managers. And again, they don’t care about puny firms. 

On why legacy-afflicted firms fight to ever recover:

Merchants hurry for the hills when they lose have confidence and these firms change into omitted and out of favour. Especially one thing cherish Steinhoff, which change into so standard and a tall fragment of most traders’ portfolios. It may possibly possibly perhaps possibly be arduous for it to assemble its archaic ranking again again. It’s that you may possibly possibly possibly possibly keep in mind but it may possibly possibly recall a in point of fact long time and there will be many begins and stops alongside the capability. Now we own viewed it below R1 and now it’s 5.6x (R5.60). I don’t deem it’s that cheap anymore but it owns some actual firms. Finally, if the management team plays the ball smartly, I deem they’ll own a in point of fact nice alternate going forward and produce quite smartly for shareholders over the long period of time. I deem it’s rather that you may possibly possibly possibly possibly keep in mind, and the the same goes for others, as smartly. However what you produce need is the archaic management to assemble cleaned out and a brand unique notion job within the alternate. You’ll need ethical alternate dealings.

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