nfb sensible finance magazine
DESCRIPTION
The NFB Sensible Finance Magazine, NFB's quarterly Personal Finance Magazine packed with articles relating to travel, investing, property, insurance, legal and other issues relevant to our everyday lives and finances.TRANSCRIPT
Eastern Cape's Community...
PERSONAL FINANCE
A FREE publicationdistributed by NFB Private Wealth Management
p r i v a t e w e a l t h m a n a g e m e n t
Issue 22Nov 2012
NFB
PERSONAL FINANCEMagazine
Eastern Cape's Community...
which is a betterinvestment?
which is a betterinvestment?
which is a betterinvestment?
GO GLOBAL OR GO HOMEexpectations are good for
investing internationally
GO GLOBAL OR GO HOMEexpectations are good for
investing internationally
GO GLOBAL OR GO HOMEexpectations are good for
investing internationally
CYBER RISKis your business
protected?
CYBER RISKis your business
protected?
CYBER RISKis your business
protected?
UNIT TRUST ORRETIREMENT ANNUITYUNIT TRUST ORRETIREMENT ANNUITYUNIT TRUST ORRETIREMENT ANNUITY
“The best way of preparing for the future is to takegood care of the present, because we know that ifthe present is made up of the past, then the futurewill be made up of the present.
Only the present is within our reach. To care forthe present is to care for the future.”
- Buddha
p r i v a t e w e a l t h m a n a g e m e n t
East London tel no: (043) 735-2000 or e-mail: [email protected]
Port Elizabeth tel no: (041) 582-3990 or email: [email protected]
Johannesburg tel no: (011) 895-8000 or email: [email protected]
Web: www.nfbec.co.za
NFB is an authorised Financial Services Provider
contact one of NFB's private wealth managers:
fortune favours the well-advised
Providing quality retirement,
investment and risk planning
advice since 1985.
editor
Advertising
layout and design
Address
Contributors
Brendan Connellan
Marc Schroeder (NFB East
London), Michelle Wolmarans (NFB
Insurance Brokers), Grant Berndt
(Abdo & Abdo), Andrew Brotchie
(Glacier International), Jeremy
Diviani (NFB Gauteng), Robyne
Moore (NFB East London), Shaun
Murphy & Wade Young (Klinkradt
& Assoc.), Max King (Investec
Asset Management), Eugene Birch
(Birch Bruce), Julie McDonald (NFB
East London), Robert McIntyre
(NVest Securities), Travis McClure
(NFB East London).
Robyne Moore
The views expressed in articles by
external columnists are the views
of the relevant authors and do not
necessarily reflect the views of the
editor or the NFB Private Wealth
Management.
©2012 All Rights Reserved.
No part of this publication may be
reproduced in any form or
medium without prior written
consent from the Editor.
Jacky Horn TA Willow Design
NFB Private Wealth Management
East London Office
NFB House, 42 Beach Road
Nahoon, East London, 5241
Tel: (043) 735-2000
Fax: (043) 735-2001
E-mail: [email protected]
Web: www.nfbec.co.za
sensible finance ED’SLETTERED’SLETTERED’SLETTER
1
Email your full name to [email protected] to subscribe to
NFB's free economic electronic newsletters.
another aspect of our comprehensive service
sensible finance nov12
Ph
oto
su
sed
inth
ism
ag
azi
ne
-123rf
.co
m
a sensible reada sensible read
Much research has been done about the recent Marikana
Massacre to properly understand what led to the tragedy,
but what is particularly interesting, is the theory linking the
event to the extent to which the miners are indebted to credit
providers and micro lenders.
There is certainly a place for responsible micro lending. And I
don't only refer to the micro lenders' responsibility, but that of
borrowers too. Unfortunately, besides irresponsible lenders, we also
have an endemic problem of irresponsible borrowing and a lack of
understanding of the potential dangers of debt. Just to briefly
highlight how expensive borrowing can become - in terms of
national credit regulations, a maximum of R1,257.50 in interest and
fees can be charged on a short-term loan of R1 000; that equates to
more than 25% a month, or 300% if annualised!
Micro lending is still a relatively new concept and the original
idea behind the concept, developed by Nobel Peace Prize winner
Muhammed Yunus, was simply that if affordable debt was made
available to very poor, yet entrepreneurial people, the funding
could help them escape from their poverty cycles. Naturally though,
this model is not the one that we see today and people often use
micro loans and credit for unnecessary purposes and for
expenditure that isn't going to generate income, but will rather, in
the long term, deteriorate living standards further.
Marikana is in Rustenburg, a town which has 33 micro loan
offices just belonging to the country's top 3 micro lenders alone, and
it would seem that the strike is not only about what the miners are
actually being paid, but also about how little miners get out each
month after debt repayments. And to a desperate miner riddled
with debt, the only solution may be to make high wage demands
and it is easy to forget the personal responsibility that we also have,
as individuals, to manage our own finances and not live beyond our
means, even when things do seem desperate.
So, with Christmas around the corner, don't get pressured into
spending money that you don't have to buy things that you don't
really even need.
Have a wonderful end of year break and please drive safely.
Please feel free to drop us a line to let us know your thoughts and
ideas about our magazine.
Brendan Connellan - Editor and Director of NFB
SENSIBLE CONTENTSSENSIBLE CONTENTSSENSIBLE CONTENTS
nfb sensible finance November 2012November 2012
2 sensible finance nov12
44
1212
1010
1919
4
6
8
9
10
11
12
14
18
19
23
24
CYBER RISK
VALIDITY OF INDEMNITY CLAUSES
CASH, INFLATION AND GROWTH ASSETS
CHECKED YOUR LIFE INSURANCE RECENTLY?
GO GLOBAL OR GO HOME
JOLLY, HOLLY HOLIDAY
UNIT TRUST OR RETIREMENT ANNUITY?
STRUCTURING SALARIES
TIME TO BUY EQUITIES?
PLANNING FOR RETIREMENT
Q &A
STEINHOFF
Is your business protected?
Changes brought about by the Consumer ProtectionAct.
What to do in a low interest rate and low inflation environment.
Find out why you should.
Investigating the argument for investing offshore.
Some interesting activities and excursions to explore over the Festive Season.
Not as easy as comparing apples with apples.
A look at basic salary structured packages.
Excellent returns currently to be gained.
Retirement years come sooner than expected; start saving now!
You ask. We answer. Advice column answering your investment, personal finance,life and/or risk insurance questions
Discussing another core holding in NVest's General Equity portfolios.
By Michelle Wolmarans,Manager - NFB Insurance Brokers (Border).
By Grandt Berndt - Abdo & Abdo.
By Jeremy Diviani,Private Wealth Manager - NFB Gauteng.
By Andrew Brotchie, head ofproduct & investment at Glacier International.
ByRobyne Moore - NFB East London.
By Marc Schroeder, Private WealthManger - NFB East London.
By Shaun Murphy & Wade Young -Klinkradt & Associates.
By Max King, Investment AssetManagement.
By Eugene Birch -Birch Bruce Chartered Accountants.
with Travis McClure, Private Wealth Manager -NFB East London.
By RobMcIntyre, Portfolio Manager - NVest Securities.
Source: www.polity.org.za
CYBER RISK
4
Is your business protected? By
, Manager - NFB Insurance
Brokers (Border).
Michelle
Wolmarans
SENSIBLE STRATEGYSENSIBLE STRATEGYSENSIBLE STRATEGY
Nobody can argue that advancements in
technology have made our lives easier
and increased the efficiency and speed
at which we work. However, the use of technology
has increased companies' exposures and can
actually make life more difficult if used in the wrong
way or abused.
Generally, any company with a website or
online presence increases their potential liability
risk. The internet which has birthed worldwide
communication has also “spun” a new web of
liability exposures. Anyone that has a website now
has the legal liabilities of a publisher which include
copyright infringement and defamation. New
legislation continues to create potential liabilities
particularly in the areas of user privacy and domain
name infringement. Statistics reveal that every day
more than 1 million people and organizations fall
victim to cyber attacks. The 2011 attack on Sony's
Play Station network is estimated to have cost the
company $171 million, compromised 100 million
customer accounts and knocked the company off
line for 24 days.
The complexity of the on-line environment
makes it difficult for most businesses to address
these risks. A cyber attack could be devasting to
almost any business resulting in network down-
time, loss of important data and loss of credibility
when customer information is compromised, and
the cost of litigation if a hacker uses the customer
information to access bank accounts or “steals”
customers' identities. Liability risks may arise as a
result of the inadvertent transmission of a computer
virus, sending an e-mail that crashes another party's
network, failure to prevent unauthorized access to
computer systems by a third party or unauthorized
employee, employees selling customers'
information on the black market or a laptop
containing sensitive client information being stolen.
Traditional liability policies do not address internet
exposures and do not provide cover against
economic losses. Insurance companies have
responded to this gap in cover by creating policies
designed for our digital age. These policies can
provide the following protection from cyber attacks
and other technological exposures:
Costs associated with any security breach or
privacy breach, including costs of notifying
consumers when their personal information is
compromised, paying for credit monitoring
services, identity theft insurance or any customer
service required specifically for those affected.
Damages arising from multimedia liability from a
business website or online and/or print media.
Covers loss of income arising out of computer
network down-time.
Cost of recovering lost data.
Expenses arising from “cyber extortion” such as
threats.
Given the potentially huge losses that may
result from a “cyber” incident and the fact that
nearly all companies now rely heavily on
technology and electronic information it is
important that companies are proactive and that
insurance is used as part of a multi-pronged risk
strategy against all the potential risks that are
associated with the ever-evolving cyber world.
�
�
�
�
�
i n s u r a n c e b r o k e r s ( b o r d e r ) ( p t y ) l t d .
sensible finance nov12
CYBER RISK
6
INDEMNITY CLAUSES
The Consumer Protection Act came into effect
on 1 April 2011 and with it brought in many
changes to various areas of law. The one we
will deal with in this article is the so called
indemnity or exclusionary or waiver clauses.
Most indemnity clauses would contravene
these provisions, in that they look to protect the
supplier from their duty in terms of the Act.
Not all indemnity clauses will be invalid, but
particularly those in fields such as the medical field,
will in all likelihood now be invalid, as the
admission room of a hospital does not allow for any
debate on the terms of the contract being entered
into.
One is often requested, for example, when
being admitted to hospital, to sign an indemnity
against any loss of whatsoever nature, including
consequential and special damages arising from
any direct or indirect loss or injury. Such clauses
have generally been upheld by our Courts, which
have held them to be the norm of sound business
practice and not contrary to public policy.
The Consumer Protection Act appears to have
changed this. In terms of Section 48 of the Act
which deals with unfair, unreasonable or unjust
contract terms, a supplier of goods or services
cannot offer or supply goods or services on terms
that are unfair, unreasonable or unjust. Such terms
include terms excessively one sided in favor of any
person other than the consumer; terms so adverse
to the consumer as to be inequitable, and the
consumer relying on false, misleading or deceptive
representations.
Further, Section 51 states that a supplier must
not make an agreement or transaction subject to
any term or condition if the general purpose is to
defeat the purpose of the Consumer Protection
Act, deprive a consumer of his rights, avoid a
supplier's obligation or duty, override a provision of
the Act, or which limits a supplier's liability for any
loss attributable to the gross negligence of the
supplier.
Any such purported transaction or agreement
or term is invalid to the extent that it contravenes
the Act.
Section 54 gives the consumer the right to
demand quality service in a manner and quality
that persons are generally entitled to expect
having regard to the circumstances of the supply
and any specific conditions agreed between the
supplier and the consumer before or during the
performance of these services.
The Act also states that in interpreting its
provisions, consideration must be given to foreign
law and conventions. The extent of consumer
protection in the United States of America is well
known, with the European Union countries following
suit. Thus, one would conclude that if any such
indemnity clauses were challenged, that our Courts
will take into account judgments in countries such
as the United States and the European Union.
Changes brought about by the Consumer
Protection Act. By - Abdo & Abdo.Grandt Berndt
sensible finance nov12
VALIDITY OFINDEMNITY CLAUSESVALIDITY OF
SENSIBLY LEGALSENSIBLY LEGALSENSIBLY LEGAL
We find ourselves in an interesting
investment environment: the local JSE
is at an all-time high; global investors
remain nervous around Europe; the US
with economic data indicates a stalling economy
that is still trying to find its feet; and lastly, most
central banks are ready to hit the printing press
button and push more capital into their economies
as further easing seems to be the order of the day.
currently the real
return from a money market fund (money market
funds typically have a return in excess of cash) is
marginally positive
the purchasing power is being eroded almost like a
In this environment investors typically turn to
safe havens like gold, cash and money market.
Historically cash-like investments have given South
Africans real returns, but no longer as we find
ourselves with a zero or negative real rate of return.
Most central banks have indicated that low interest
rates will be around for extended periods of time
and thus this is a problem not in a hurry to leave.
This is when you are in an investment and your net
return is above that of the inflation rate. The danger
of a negative real return is that you lose purchasing
power and even with a capital increase you
cannot buy the same amount of goods next year
as you did this year.
Some investors have remained in cash or
money market funds waiting for signs of a recovery
and an opportune time to switch into growth
assets. This may not come for the next 3, 5, 7 years
or longer so it is important to illustrate current
investment options.
The first graph indicates that
. We have used CPI as a proxy
for inflation, however, some may argue that this is
below actual inflation with food, medical aid, and
electricity costs all rising substantially in excess of
CPI.
As an aside, inflation is not at its high currently
being around 4.9%. With the South African
economy struggling, and with inflation in its target
range, the Reserve Bank may cut rates further and
in so doing, reduce this real return.
A second thought is to consider the following
situation where someone is retired and drawing an
income of say 5% of the portfolio: his or her real
return is -5% (assuming a return of 5% and inflation
of 5%). In a situation like this we sometimes get
asked if the capital is going backwards, however,
in reality the capital value would remain flat, but
Source: I-Net Bridge
What is a real rate of return?
8 sensible finance nov12
CASH, INFLATION ANDGROWTH ASSETS
CASH, INFLATION ANDGROWTH ASSETS
continued on page 20...
SENSIBLE RETURNSSENSIBLE RETURNSSENSIBLE RETURNS
What can investors do in this
low interest rate and low
inflation environment to give
their portfolios a
reasonable chance to
enjoy real returns?
By ,
NFB Gauteng,
Private Wealth
Manager
Jeremy Diviani
Find out why you should. Contributed by Seugnet
Moggee. Source: www.polity.org.za
SENSIBLE PLANNINGSENSIBLE PLANNINGSENSIBLE PLANNING
CHECKED YOUR RECENTLY?LIFE INSURANCE
9sensible finance nov12
Jeremy is recently divorced and has just started
dating again. This has gotten him thinking
about his future and the care of his minor
daughter, Hannah, who is under the age of 18
years. Jeremy is reminded that his ex-wife is still the
beneficiary of his life insurance policy and makes a
mental note to contact his insurance broker to
revoke his ex-wife and nominate Hannah as his
beneficiary in the event of his death to ensure that
the proceeds of his policy are paid out to Hannah.
But what will happen if Jeremy passes away
before he has the opportunity to change the
beneficiary on his life insurance policy? Will the
proceeds of Jeremy's policy be paid to his ex-wife
and will his minor daughter, Hannah, be left without
any rights to the proceeds of this policy? The reality
is that circumstances like these often occur in
practice and in many cases result in unforeseen
and even unfortunate consequences. In this case,
the proceeds of Jeremy's policy would have been
paid to his ex-wife and not to Hannah.
But let's say Jeremy did get the chance to
revoke his ex-wife and nominate his daughter as
beneficiary on his insurance policy so that she
would receive the benefit upon his death. The
question now is, as a minor, would she be entitled
to receive the proceeds? The general position in
South African law is that benefits accruing to a
minor would be paid over to the Master to be
retained in the Guardian's Fund until the minor
reaches an age of majority. Life insurance policies,
however, differ in that the insurer will pay the
proceeds directly to the minor regardless of his/her
age. In reality, this means that the minor's legal
guardian will generally administer the money on
their behalf, unless the guardian is illiterate, in which
event the insurer could decide to rather pay the
proceeds to the Guardian's Fund. Accordingly, in
Jeremy's case, Hannah's legal guardian would thus
be entitled to administer the proceeds of the
insurance policy on behalf of Hannah, and where
the guardian is the natural mother, it could mean
that Jeremy's ex-wife again has control over the
proceeds, even though she is no longer a
beneficiary of his policy.
A
testamentary trust, created in Jeremy's will or even
a family trust established by Jeremy during his life,
can be nominated as the beneficiary of his
insurance policy. The insurer will then pay the
proceeds to the trust and not a specific person, to
be administered by the trustees of the trust for the
benefit of the beneficiaries of the trust. In his will or
family trust, Jeremy can then nominate Hannah as
the beneficiary of the trust as well as determine
who the trustees of this trust should be.
Another aspect Jeremy should be aware of
when reviewing his life insurance policy, is
In the case of a revocable
beneficiary nomination, the beneficiary of a policy
can be revoked without the consent of the
beneficiary being required. In the instance where
Jeremy's ex-wife's nomination in his policy is
revocable, he can revoke her as a beneficiary
without her consent being required. However, with
irrevocable beneficiary nominations you can only
change or revoke a benefit with the express
consent of the beneficiaries. The reason being,
these beneficiaries have aquired rights the
moment they accepted their nomination in writing,
and accordingly these rights cannot be changed
unless they expressly consent thereto, unless the
policy expressly stipulates otherwise.
Lastly, Jeremy should note that
When we are confronted with all the possible
implications flowing from Jeremy's example, it is
clear how important the decision as to
beneficiaries in your insurance policy is as well as
how important it is to regularly review your policy
and beneficiaries. What is also clear is that with
proper estate planning you could also
and it also remains important
to consult an experienced estate planner when
planning for the future.
A trust can be a useful tool forJeremy to solve this conundrum.
thedifference between revocable andirrevocable beneficiarynominations.
if he fails tonominate a beneficiary, theproceeds of his insurance policy willbe regarded as an asset in hisestate upon his death and will bepaid to his estate for divisionaccording to his will or the rules ofintestate succession if he has left nowill.
limitsome of the risk of changingcircumstances
GOOR GO HOME
GLOBAL
sensible finance nov1210
SENSIBLE PORTFOLIOSENSIBLE PORTFOLIOSENSIBLE PORTFOLIO
Investigating the argument for investing offshore.
By , head of product & investment
at Glacier International.
Andrew Brotchie
Many industry experts agree that now is a
good time to invest internationally.
Relative returns from global investments
over the past 10 years have typically not been
good, but expectations are that the next decade
will see a reversal of this trend. Valuations are
currently generally more attractive overseas than
they are locally and we believe there is value to be
found in international investments.
Europe, as a region in the spotlight at the
moment, still has many challenges to overcome.
Political uncertainty generally does not have a
positive effect on growth assets such as equities.
However, the prevailing political situation has little
bearing on how asset managers assess their
portfolios over the long term. If the markets have
priced in the uncertainty – and the consensus is
that the European market has – then there is
typically value to be found in well-managed,
quality companies.
In addition, many European-based companies
have diversified to the extent that most of their
earnings are derived from activities outside of
Europe anyway. How well a company is managed
matters more than where it is listed.
Buying and holding good quality companies
offers inflation protection and the chance to grow
your capital over the long term. Diversification
always has been, and remains, a key reason to
invest offshore. It opens up access to many more
top fund managers and a much wider universe of
investment options, geographic regions and
sectors from which to choose.
Another key reason favouring offshore
investments at the moment is the fact that the rand
is generally considered to be overvalued currently,
providing an opportunity to seek out international
opportunities at a favourable price.
Investors are often uncertain regarding the
ideal percentage of the portfolio to invest offshore.
The answer is simply that it depends on the
investor's individual circumstances. For example,
are you planning to retire to a foreign country or do
you have children studying overseas? If this is the
case, then you would probably have a higher
allocation to offshore assets than an investor who
was simply looking to diversify a portion of his assets
offshore.
The debate around whether to invest in
developed or emerging markets remains an
interesting one and there are widely differing
viewpoints on the topic. It's important to remember
though, that one can still obtain emerging market
exposure via a company listed in a developed
market that receives some of its earnings from
emerging market countries.
For investors who are daunted by the many
choices available, Glacier International – a division
of Glacier by Sanlam – has launched
After completing a risk-profiling exercise,
investors are placed in one of three risk profiles
(cautious, moderate or aggressive), each of which
has a list of five or six funds from which to choose.
All are daily traded, actively managed funds which
simplifies choice, administration, and ensures
liquidity.
The Navigate range of funds is offered as an
investment option within the Global Life Plan,
thereby giving investors all the associated benefits
of investing within a life plan. Due to the structure of
the investment, no tax is incurred within the plan for
any income (interest or dividends) or capital gains.
There are estate planning advantages too. By
investing via an offshore life plan issued by a South
African life company, investors ensure that the
investment forms part of their South African estate,
thereby avoiding the complications of having part
of their estate located offshore.
When it comes to investing offshore, the
standard investment principles should apply –
review your portfolio regularly and ensure you
understand what you're investing in, even if it's in a
foreign country.
“Navigate by Glacier International”,a range of carefully selected fundsacross different investor risk profiles.
11
With petrol having increased again
during the first week of October
(approximately the 8th time this year),
holidaymakers are going to be hard-
pressed to keep that heady summer holiday feeling
through until January next year. As we all know,
households have had a tough 2012 so far, and with
a higher petrol price having a ripple effect on food
and transport costs (not to mention the electricity
and rates increases), budgets are going to have to
get even tighter – and all this just before Christmas.
With this in mind, we have done some brain-
storming and come up with some interesting
activities and excursions for your family to explore
without breaking the bank this season – all within
our own Eastern Cape borders. Here are some day
trips and a few one or two-nighters to consider.
- www.areena.co.za
Approximately 20 minutes outside of East London
on the East Coast Resorts Road, Areena offer what
they call “Mild to Wild” adventure activities,
including the following: a zip-line skywalk, quad-
biking, archery, paint-ball, abseiling and canoeing.
For the not-so-energetic, a relaxing and peaceful
river cruise will be just right on a still and balmy
summer day.
-
www.beachcomberhorsetrails.co.za
Based in Kenton-on-Sea, Beachcomber offers horse
trails on either the beach or through the breath-
taking Sibuya Game Reserve. They cater to all
riding levels and accommodate anyone from 7
years and up. Rides start at R200 for 1½ hours;
discounts are offered on bigger groups.
-
www.suninternational.comApproximately 1 hour
drive from East London, even if you don't stay
overnight, the Fish River Sun is great for a day visit.
They offer many activities including the following:
championship 18-hole golf course, mini-golf, fishing,
dune-boarding, skim-boarding, nature trails, a
beach shuttle down to the Castaways Beach Bar,
and Kamp Kwena which offers activities exclusively
for children.
-
www.kraggakamma.com
Situated on the outskirts of Port Elizabeth, the
Kragga Kamma Game Park is good value for
money if game-viewing features on your to-do list.
For the self-drive, the entrance fees are as follow:
adults – R50; scholars – R20; children under 6 years
of age are free. Among the different game which
can be seen are many different buck species,
giraffe, cape buffalo, ostrich, warthog and rhino.
Interaction with their tame cheetah is also possible.
-
.
For somewhere different to eat, off the N2 Highway
across from Tsitsikamma Lodge, along scenic,
forested countryside, you will find the treasure
which is Fynboshoek Farm. You will be greeted and
hosted by award-winning cheesemaker, Alje van
Deemter (a qualified microbiologist), who will treat
you to delicious lunches of his home-made
cheeses, just-picked, freshly-grown greens and
piping hot breads. Languish on the deck
overlooking the dam and enjoy the peace....over a
glass of chilled wine and platters of delectable
farm fare.
PS – call ahead for bookings and directions: 042 –
280 3879
And pushing the border of the Eastern Cape,
Plettenburg Bay offers the following:
- www.plettpuzzlepark.co.za
For something different try their 3-D maze (the first in
SA) or puzzling forest walk. This is an awesome
activity for the family to try together and will keep
“rated as one of the best places
to eat on the Garden Route”
Areena Riverside Resort
Beachcomber Horse Trails
Fish River Sun
Kragga Kamma Game Park
Fynboshoek
Plett Puzzle Park
Some interesting activities and excursions to explore over the FestiveSeason. By - NFB East London.Robyne Moore
HOLIDAYJOLLY HOLLY HOLIDAYJOLLY HOLLY HOLIDAYJOLLY HOLLY
sensible finance nov12
continued on page 22...
SENSIBLE EXPLORINGSENSIBLE EXPLORINGSENSIBLE EXPLORING
12
The Unit Trust
The Retirement Annuity
In the world of investments, you get building blocks or
base elements that all structures comprise of; these are
the typical asset classes, i.e shares, bonds, cash,
property, commodities. Probably the biggest
revolution in the investment world was the creation of
what is known as the unit trust. The unit trust is not a
base element, but rather is a connection of base
elements; as such it can be considered on the same
level as the base elements.
. Where before it was difficult to buy a
government bond, a stake in Warren Buffet's
company, a nugget of gold and a section of a viable
commercial property without some serious ammo, time
and research, now you can change the volume on
your hi-fi, using your iphone, while on the loo as you
skype call your mom in Australia.
Cash: taxed at marginal rate, exemptions apply.
Property: rentals taxed at marginal rate, CGT
applicable on gains.
Local Equities: dividends now taxed in your hands at
15%, CGT applicable on gains.
Offshore Equities: dividends taxed at marginal rate,
small exemption available. CGT applicable on gains.
Offshore fixed interest: distributions fully taxable.
A unit trust is taxed according the base elements it
comprises of.
The next major development that I wish to highlight,
although not as much of an extreme innovation as the
unit trust, is what we know today as the retirement
annuity. The retirement annuity by itself is just a
structure; it is made up of nothing but tax legislation. It is
a parking bay, in which we can place assets, the most
popular 'parker' in the bay being the unit trust.
The two cannot be compared, just as a Ferrari being
compared to a garage just doesn't make any sense.
However, we can argue where the Ferrari is better off:
out tearing up the highway, or being polished up in its
show room. As long as the Ferrari on the highway is
being compared with a similar or identical car as in the
garage, there are grounds for comparison.
This brings me to my major talking point in this
article,
Putting your foot down
on the pedal, or keeping her preserved for a later
purpose.
If you haven't picked up already, the Ferrari is a
The unit trust did to the
investment world, what Apple did for the world of
technology
The base elements have different tax consequences,
as follows:
The
most significant attraction to the retirement annuity is
that allows the assets (unit trusts) parked within it to
flourish untaxed.
which is better: a unit trust housed within, or
outside of a retirement annuity?
�
�
�
�
�
sensible finance nov12
I was recently asked, which is a better investment: a unit trust or a retirement
annuity? This type of question is at least, a pain in the neck and, at most, an
opportunity to help a layman investor better understand the pecking order in the
world of investments. By , NFB East London, Private Wealth
Manager
Marc Schroeder
UNIT TRUSTRETIREMENTANNUITY?
ORUNIT TRUSTRETIREMENTANNUITY?
ORUNIT TRUSTRETIREMENTANNUITY?
OR
Ima
ge
cre
dit:123R
FSto
ck
Ph
oto
metaphor for an investment. For my article the
investment I am going to analyse is what is referred to
as the balanced blend in the graph that follows,
courtesy of I-Net Money Mate
.
The balanced blend comprises of some of the
longest standing balanced, asset allocation type unit
trust funds in South Africa, the breakdown is as follows:
40% Investec Opportunity
30% Allan Gray Balanced
30% Coronation Balanced Plus
The portfolio is illustrated by the red line. The JSE is
in Blue, the sector average is in yellow and inflation in
green.
The returns have been remarkable: the portfolio
has averaged 17% per annum since January 2001, a
vast outperformance over the equity market (avg 14%
per annum), but with significantly less risk.
So, which is better? Holding the investment
directly, or within the RA? I trust all understand now the
difference here between asking this question and
'which is better, a unit trust or a retirement annuity?'
It's a subjective call, but here are how the stats
stack up assuming a R100,000 lump sum investment on
the 01.01.2001, assuming a marginal rate of tax of 35%,
for purposes of the CGT calculation.
Current Value R 610, 200 R 610, 200
Tax on income marginal retirement tax,
rate now at 0%
Dividends withholding tax yes - 15% not applicable
CGT Yes No
Net CGT R 550, 736 R 610, 200
Access Full Partial*
Estate Duty Included Not Included
Protected from Creditors No Yes
Protected from scorned
ex wife No No
We can see that from a purely rands and cents
perspective, there is no more tax-efficient savings
structure than the retirement annuity; no investment will
outperform its twin if the twin is housed within the
retirement annuity, even more so now considering that
dividends are received tax-free into retirement funds.
So why not put all your money into the RA? The
problem is that South Africa is one seriously volatile
investment destination, with our currency sailing in the
wind like a kite, and with the political outlook as stable
as Shaik's latest medical report, it would be foolish to
relinquish total access to your funds. The ANC have
made suggestions that pension funds should start
investing in 'government developmental projects'; how
serious this is to be considered, only time will reveal. It
seems the drive is for government to be encouraging
people to invest for their retirements, not dissuade
them, evidenced by retirement fund's tax being
reduced to 0% and tax deductions permitted on
contributions. For this reason, I would advise anyone to
maximise the tax-efficiencies offered by retirement
annuities and pension funds. Over and above that,
investing directly into well managed unit trust funds is
probably the safest, surest and cheapest way of
generating wealth over the medium to longer-term.
Considering the quality managed unit trust
solutions out there, whether you are the park and polish
investor, or love screaming over the highways, there is
no reason why your 'car' shouldn't be a Ferrari.
So, next time instead of asking, “Which is better? A
unit trust or a retirement annuity?” Rather ask, “How
long is a piece of a string?”
(Please see graph 1
below)
*Note that while you will not have
access to the full amount invested
within the RA, on your death the
full amount can be accessed by
your beneficiaries subject to retirement tax tables.
�
�
�
Direct Holding RA Holding
13sensible finance nov12
Graph 1
STRUCTURING SALARIESSTRUCTURING SALARIESSTRUCTURING SALARIES
Avery common question posed to us in
practice is: “how can I reduce my
monthly taxation or improve my salary
structure to become more tax efficient?”
For pension fund contributions:
For the provident fund contributions:
Travel allowances
medical
aid deduction
Well, this is
one place that in my opinion Oupa Maqashula
(Commissioner of SARS) and SARS have been very
CLEVER in their approach to allowable deductions
to the salary earner.
Basic salary structured packages in today's
world encompass basic salaries, travel allowances,
motor vehicle and medical aid fringe benefits and
then some sort of company and employee
contribution to pension and/or provident funds. It is
important to note that there is a difference in the
treatment for tax purposes of the pension fund and
provident fund contributions.
Current pension fund contributions by the
employee may be deducted to the greater of 7,5%
of remuneration from retirement funding
employment, or R1 750.
- Any excess may not be carried forward to the
following year of assessment.
- A maximum of R1 800 per annum may be
deducted as arrear pension fund contributions by
the employee.
None of the current or arrear contributions are tax
deductible for the employee.
There are indications that provident funds
might disappear in the future. The reason is that the
main attraction of a provident fund, namely to be
able to make a 100% lump sum withdrawal at
retirement, will no longer be available to investors.
All future contributions will be subject to a
maximum withdrawal of one-third, as is the case
with pension funds and retirement annuities.
have been clamped down on
by SARS. When claiming a travel allowance only a
detailed log book will be accepted for the travel
deduction. I think it is important to highlight what a
detailed log book entails: it is effectively a
reconciliation of daily mileage split between
business and private travels. Private travels include
traveling from home to work and back again. Just
in case you were wondering how SARS checks up
on this, they have been requesting your last vehicle
service record or copy of your service log to
correspond to the mileage per the log book in the
month in which the vehicle was serviced. So please
be careful when compiling your log books as they
need to be accurate!
It is also important to mention that the
has now been replaced by a “tax
credit” regime that will be effective from 1 March
2012. Basically the employee who is on a medical
aid will no longer be able to claim the deduction
(limited to the capping amount), but a tax credit
will be given which will act in a similar way as the
primary and secondary tax rebates. Tax credits are
not refundable, which means that you will only
qualify for tax credits to the extent to which you
pay tax.
In short, there is very little that is afforded to
straight salary earners that wish to have elaborate
schemes in place to reduce and/or postpone the
taxation that is levied in terms of the PAYE tables.
Cellphone, entertainment and subsistence
allowances are all best left off as no deduction is
permitted against these allowances anymore; it is
far more advisable to have the above on a re-
imbursive basis, which is generally speaking non-
taxable.
In the next issue I will touch on commission
earners who have a far better platform to play
with.
14 sensible finance nov12
SENSIBLY LEGALSENSIBLY LEGALSENSIBLY LEGAL
A look at basic salary structured
packages. By
- Klinkradt & Associates.
Shaun Murphy & Wade
Young
TIME TO BUY?EQUITIES
Excellent returns currently to be gained. By
, Investment Asset Management.Max King
sensible finance nov1218
The recent stimulatory actions of the European
Central Bank (ECB) and American Federal
Reserve caused equity markets to rally, even
after critics pointed out that similar actions have
not necessarily had sustainable positive effects in
the past. Similarly, equities have rallied following
positive economic data and while they might suffer
short-term setbacks, they always seem to bounce
back. This increasing perkiness of equity markets
perhaps suggests a simple truth – that equity
markets want to go up.
To those who have a consistently pessimistic
view about the future direction of the markets and
economy, this is anathema. Economic data
around the world has been disappointing,
suggesting that the global economy has turned
down. Even emerging economies are faltering and
the euro-zone is in deep and irredeemable crisis.
Forecasts for corporate earnings have been sliding
remorselessly.
There is no shortage of long-term equity bulls,
but – almost without exception – they do not
expect an improvement in markets for several
months, and most are looking for another sell-off,
probably triggered by a flare-up in the euro-zone
crisis, to provide a buying opportunity.
The only factor holding back the long-term
bulls is a fear of short-term downside, but should
that downside materialise, then it is likely to be
fleeting. There are just too many buyers into
weakness and not enough nervous current holders
who are liable to be panicked into selling. The
evidence points to increasing investor resilience. In
Spring 2012, markets dropped only 10% before
recovering.
The increased resilience of markets, and
consequent fall in volatility, reduces the risk of
investment – and that makes investors willing to
pay higher prices. The result is a self-perpetuating
confidence loop that pushes prices steadily higher,
reinforced every time that a short-term setback is
recovered. Sooner or later, an even more powerful
factor will kick in: the realisation that equities
represent an each-way bet.
If the economic outlook improves and earnings
forecasts pick up, the current valuation of the
market will appear cheap. If estimates for
corporate earnings in 2013 start to rise, there will be
no holding the market back. On the other hand, if
the economic news continues to be disappointing
or the euro-zone starts to unravel, there can be
little doubt that central banks around the world will
inject liquidity into the global economy
Whether this works in economic terms depends
on how it is done. Purchases of government bonds
by central banks has provided little economic
benefit as the money created sits on bank balance
sheets without being transmitted into the broader
economy, but central banks are becoming more
imaginative. The Fed has encountered some
success with 'Operation Twist' and markets were
encouraged by its decision on an open-ended
purchase of mortgage-backed securities, while the
Bank of England's 'Funding for Lending' scheme is
promising.
One of the oldest common wisdoms on Wall
Street is 'don't fight the Fed' – in other words, buy
equities when monetary policy is being eased; sell
when it is being tightened. The adage has been
forgotten in the current obsession with
macroeconomic data.
In all
probability, a significant rerating of equity markets
without a strongly visible improvement in the
economic or corporate outlook will be regarded
with astonishment and derision by the sceptics, but
before long, the fundamentals will improve.
As growth picks up and corporate earnings
catch up with the market, the sceptics will, at last,
turn positive.
www.investecassetmanagement.com
We believe that thetime to buy equities is now, whilemonetary policy is extremely loose.
However, with a tightening ofmonetary policy then looming, it will betime to turn cautious. Until that point isreached, there are some excellentreturns to be gained.
SENSIBLE TIMINGSENSIBLE TIMINGSENSIBLE TIMING
Retirement years come sooner than expected;
start saving now! By - Birch Bruce
Chartered Accountants.
Eugene Birch
Iwould like to tell you a true story about Sam. It is
something that I experienced personally and I
would like to warn other employees, in
particular, self-employed individuals, in order for
them to make adequate provision for their
retirement years.
Retirement Annuity contributions have the following
attributes:
The most important attribute of RA policies is
that the investment is protected from creditors.
Sam was initially employed, but later became
a very successful self-employed businessman who
was happily married with a thriving business. Life
treated him well as he enjoyed the luxuries of cars,
elaborate homes and found plenty of time for
vacations. His responsibilities grew after a few years
of creating a family. Thoughts of retirement were
far from his mind and very little planning was
pursued in preparation for old age.
Every time that Sam changed employment,
pension policies were merely cashed in to buy a
new motor car or house or put towards an overseas
trip. Retirement was years away in his mind and he
decided that retirement planning would be done
at a later stage.
Sam continued to move from one workplace
to the next and continued to cash in his pension
policies until the time that he became self-
employed, when no pension monies remained. His
years of self-employment is what I like to call the
“danger years”: dangerous, because soon enough
a couple of years have passed while trying to build
up a business, and retirement planning has not
been given a second thought.
Now the years are rolling by quickly and Sam's
marriage comes to an end. He remarries and
before long he is into his third marriage, bringing
with it more offspring. Once again, no thought has
gone into his retirement planning, due to the
expenses of providing for a family. Sam's business
folds at this point in time and he is declared
insolvent, consequently losing all assets. Fortunately
for Sam, his third wife is able to look after him until
he passes away.
The retirement years come sooner than
expected, and if Sam had not neglected putting
money away in preparation for these years, he
would have been financially comfortable to a far
greater extent.
1. They are tax deductible up to 15% of taxable
income (subject to certain conditions).
2. Any unclaimed contributions can be carried
forward to subsequent tax years and claimed.
3. Upon retirement, the taxpayer enjoys certain tax
free benefits.
Sam experienced divorce, married three times,
had more children than expected and lost his
business and assets. These are expensive
experiences, thus the temptation arises to draw on
pension policies and not contribute towards RA
policies. However, if Sam had contributed to an RA
policy, he would not have been able to cash
money in before the age of 55, which is a
beneficial form of protection.
In
Sam's case, where he became insolvent, creditors
would not have been allowed to touch this money.
This fact alone makes an RA policy necessary in
any employee or self-employed person's retirement
planning.
PLANNING FOR RETIREMENTPLANNING FOR RETIREMENTPLANNING FOR RETIREMENT
19
Physical Address: 80 Frere Road, VincentPostal: P O Box 13602, Vincent, 5217Tel: 043 – 721 0441
sensible finance nov12
SENSIBLE RETIREMENTSENSIBLE RETIREMENTSENSIBLE RETIREMENT
sensible finance nov1220
...continued from page 8
“silent assassin”
So what can investors do in this low interest rate
and low inflation environment to give their portfolios
a reasonable chance to enjoy real returns?
.
One solution is to have saved more than
necessary in your build up to retirement, so you do
not have to worry about these matters. However,
there are not too many who can afford this luxury
and it is thus important to understand what one
can do to rectify this. If someone is retired then
they can try to reduce their costs and thus portfolio
drawings, and for those in the pre-retirement phase
of life it is important to save more to ensure a
sustainable retirement. In both scenarios it is
necessary to take on a certain amount of growth
assets in a portfolio that should, over time, provide
an inflation hedge.
A third consideration is that although money in
the bank is referred to as a risk-free asset, recent
events have shown there is still the risk of capital
loss in the form of default by the issuer (bank or
government).
NFB
focuses on long term sustainable investing and it is
with this in mind that the balance of this article
continues.
They are assets that display capital volatility and
often provide a yield by way of a dividend or
interest income. For my illustration I have not
included offshore asset classes and so examples of
assets further up the risk spectrum are bonds, listed
property and shares.
The above graph shows the investment profiles
if you were to hold these riskier assets described
above over the last 10 years. It is evident that an
investor would have been rewarded for holding
bonds, listed property and equities as they have
cumulatively and substantially outperformed cash
represented by the green line.
The previous graph illustrated cumulative returns so
let us now look at the year on year returns and
include inflation for benchmarking purposes.
The chart above more clearly indicates the
volatility of the various asset classes. We can see
that over the last 8 years listed property or equities
have outperformed CPI and cash 63% of the time.
The merits of being in these perceived riskier
assets is evident, but what is the risk versus return
trade off?
The following scatter plot taken over the last 10
years illustrates the risk and reward profile of the
four typically available asset classes as well as
inflation linked bonds (another instrument to hedge
against inflation).
Source: I-Net Bridge
Source: I-Net Bridge
What are growth assets?
CASH, INFLATION ANDGROWTH ASSETS
CASH, INFLATION ANDGROWTH ASSETS
continued on page 22...
SENSIBLE RETURNSSENSIBLE RETURNSSENSIBLE RETURNS
Source: Morningstar
Cash is shown as the blue dot; the All Share Index is
the blue triangle and the Listed Property Index as
the red triangle. The All Bond Index has been
included as well as inflation linked bonds (green
square). Inflation linked bonds have been included
as they give an indication of the risk versus return
profile of inflation. They typically trade at a
premium above inflation.
Once again we can see that listed property
and equities have significant volatility (risk is shown
on the x axis and returns on the y axis) when
compared to cash, but over the long term have
rewarded investors with inflation beating returns.
The main concern an investor has investing in
these growth assets is the possibility of capital loss,
however, this can be mitigated through active
management of the various asset classes and
within the different asset classes themselves. A unit
trust manager has various different instruments that
he or she can invest in for example; in an equity
fund the manager can rotate between financials,
resources and industrials; and in a bond fund the
manager can choose between corporate bonds,
sovereign debt or inflation linked bonds.
The combination of the various asset classes
should match ones time horizon and risk profile and
it is essential that you speak to your financial
advisor to ensure your asset allocation is tailored to
your specific investment needs.
JOLLY HOLLY HOLIDAY ...continued from page 11
...continued from page 20
22 sensible finance nov12
SENSIBLE ACTIVITIESSENSIBLE ACTIVITIESSENSIBLE ACTIVITIES
SENSIBLE RETURNSSENSIBLE RETURNSSENSIBLE RETURNS
CASH, INFLATION AND GROWTH ASSETSCASH, INFLATION AND GROWTH ASSETS
everyone on their toes. Each activity for adults
costs R60 (both is R110) and for children under 12 it
is R50 (both is R90).
-
This is a bird of prey rehabilitation centre just
outside of Plettenburg Bay. Their aim is to generate
awareness of these regal birds; they rescue,
rehabilitate, and where possible, release them into
the wild. Radical Raptors offer flying displays (three
shows a day), using a number of trained, non-
releasable birds which are flown around and to
you, giving you an opportunity to interact with the
birds. The costs are R80 for adults and R60 for 12-
year olds and under.
We hope that at least some of the above will be
great ideas to engender excitement during the
festive season. And for those of you that still
manage to have some funds left over at the end of
the holidays, please keep NFB's charity of choice,
the Loaves and Fishes Network, in mind – you can
donate to this worthy charity that cares for the
youngest of our province using your credit card on
their website (www.lafn.co.za) or by registering
online for a small debit order deduction each
month.
www.radicalraptors.co.za
Interesting fact: hand -raised raptors are
classified as human imprints as they have identified
themselves as humans. These birds will not breed
naturally and therefore are not released into the
wild.
NFB – always looking out for your best financial
interests – in all things and at all times during the
year.
Radical Raptors
23
Q:
A:
What sort of percentage should one have
invested offshore as part of ones portfolio? Are
there any restrictions to this allocation with regards
to Retirement Funds?
The amount that should be invested offshore as
part of an Investor's portfolio will more often than
not come down to his/her risk portfolio, financial
needs and current market conditions. Investing
offshore is often tricky as you not only have to deal
with offshore markets, but also with the volatility
that our Rand often presents.
It is important to remember, that despite all our
natural resources, South Africa only makes up less
than 1% of the world economy. It is important,
therefore, to have some global diversification. In
the late 90's it was considered normal to have
around 60% of your portfolio invested offshore.
Over the last 10 years, however, our Rand
strengthened considerably and Emerging Markets
such as SA were in favour. This meant that the
average foreign exposure was probably less than
20%.
We live in a Global Economy and we are
starting to see more value offshore again. Our
Rand has shown some weakness of late and global
companies are at compelling valuations. At current
levels, an offshore allocation of between 20% and
40% is probably suitable, depending on the
individual client's needs and risk.
There are certain restrictions regarding the
amount of offshore exposure one can have in
retirement funds. This is known as Regulation 28. It
limits the extent to which retirement
funds can invest in particular assets or asset
classes. The purpose of this regulation is to protect
investors in retirement funds from the effects of
poorly diversified investment portfolios, over-
exposure to higher-risk asset classes, as well as
complex financial instruments and portfolios.
Regulation 28 applies to retirement annuities,
pension and provident funds and preservation
funds, but excludes post retirement products such
as living annuities.
Broadly speaking, compliance with Regulation
28 involves, inter alia, a maximum exposure of 75%
to Equities, 25% to Property, and 25% to Foreign
Assets. Compliance with Regulation 28 is now
required at retirement fund and member level
(whereas it was previously only required at
retirement fund level). Individual investors are,
therefore, required to ensure that the asset
category exposure of their investments is compliant
with the limits prescribed by Regulation 28.
Most Cautious and Balanced Unit Trust Funds
are already Reg 28 compliant. They will have it
written in their investment mandates so accessing
these types of portfolios already ensure that you do
not have to worry about being compliant. It is
interesting to note that most of the Fund Managers
in the Balanced and Cautious space have
maximised their allowable exposure offshore in their
respective portfolios. This, therefore, gives a good
indication as to where these asset managers are
currently seeing value. If they could break the rules,
they would, and more than likely have more
offshore exposure.
It is important to understand the risk of offshore
investments and it would be best to chat to your
Financial Advisor to ensure that your offshore
allocation fits in with your financial needs and risk
profile.
Travis McClure
Please address all Questions to: Travis McClure,
NFB Sensible Finance Q&A, Box 8132, Nahoon,
5210 or email: [email protected]
sensible finance nov12
SENSIBLE Q A&SENSIBLE Q A&SENSIBLE Q A&
“Sensible Finance - Questions and Answers” is an advice
column that will allow our readers the opportunity to write to
a professional and experienced financial advisor for advice
regarding investments, personal finance, life and/or risk cover.
Travis McClure will be answering any questions that you may
have.
24
STEINHOFFSTEINHOFFSTEINHOFF
Today we discuss another core holding in our
managed general equity portfolios, namely
Steinhoff International Holdings Limited (SHF).
We included Steinhoff into our portfolios about
18 months ago once the first effects of the group
restructurings became clearer. Steinhoff is a
multinational group that is listed on the JSE. It
began its life many years ago as a furniture
manufacturer established by Bruno Steinhoff.
Markus Jooste was brought in as Chief Executive by
Bruno to take the business forward. Over the past
few years he has expanded the group dramatically
by making many bolt on acquisitions, as well as
bringing in several significant deals such as the
Conforama acquisition in Europe.
Today Steinhoff is a Top 40 constituent on the
JSE with a market capitalisation of R48 billion. It is
the controlling company in a diversified group that
controls JD Group, KAP International, and has a
20% stake in PSG Group (all listed on the JSE), as
well as controlling the unlisted Steinhoff Europe (the
Conforama acquisition). The group has a policy of
owning its own trading outlets, which means that it
has a large property portfolio. This policy should
prove quite positive in Europe over time as the
group is able to lock in occupancy costs by
acquiring properties at currently depressed prices.
Whilst this may seem like an unfocussed
conglomerate, it is actually a vertically integrated
operation that owns chip board manufacturers,
transport logistics, property outlets and retail and
wholesale businesses throughout the furniture retail
chain.
Steinhoff already has a credit arm in its various
businesses and its strategic stake in PSG could well
signal closer alignment with Capitec for credit and
insurance products. Steinhoff is now the second
largest furniture group in Europe after IKEA. Like
IKEA, it has a value-focussed offering, which has
seen it gain traction in recession focussed Europe.
Notwithstanding the belt-tightening in Europe,
Steinhoff is strongest in Germany, France and
Eastern Europe; areas of Europe that have
performed relatively the strongest.
Steinhoff has made impressive strategic
progress in tidying up the group structure, both in
South Africa and in Europe, where it has bought out
minority interests and by monetising its retail
participation interests in Eastern Europe and by
purchasing its retail footprint.
Steinhoff recently released its annual results to
30 June 2012. Given the large scale corporate
activity, these were exceptionally complicated to
interpret, however, it is clear that the underlying
quality of Steinhoff's earnings continues to improve
with strong operating cash flows. Group revenue
was R80 billion and Avior Research estimates the 12
month forward diluted headline earnings per share
to be 304 cents, and the annual dividend for 2013
to be 85 cents. At the current ruling price (3
October 2012) of R26.55, this places the share at a
forward Price Earnings (PE) ratio of 8.7 times and a
forward dividend yield of 3.2%. Group policy is to
pay a distribution once per year. Aside from the
mining companies, this PE ratio is about the lowest
in the Top 40 index. We believe that,
notwithstanding the headwinds that the group may
face in Europe, that it trades at an attractive rating
and we would accumulate Steinhoff to between
5% – 7.5% of a general equity portfolio.
It is our view that investors will continue to value
Steinhoff more conservatively that would otherwise
be the case until the pace of corporate activity
subsides or a European Initial Public Offering (IPO)
of its international retail operations allows for a
more accurate sum of the parts valuation basis.
The group has a stated aim of listing on a European
exchange once market conditions allow. It will,
however, only do such a deal if it is positive for the
group. This should raise its profile in the major
markets in which it operates as well as allow it to
restructure its funding profile, including removing
convertible bonds that currently have a dilutive
impact on earnings.
Steinhoff continues to make major investments
not only in intangible assets, but also in physical
property as the group expands and improves the
quality of its retail businesses in Europe. During the
current financial year, the evolving group structure
should provide investors with improved
transparency and sharper strategic focus within the
different group entities. We expect share price
outperformance predominantly from a re-rating of
the group as investors in general gain a deeper
appreciation of the value contained within the
different group entities.
Discussing another core holding in NVest's General Equity
portfolios. By , Portfolio Manager - NVest
Securities.
Rob McIntyre
sensible finance nov12
SENSIBLE PORTFOLIOSENSIBLE PORTFOLIOSENSIBLE PORTFOLIO
Anthony Godwin
Gavin Ramsay
Andrew Kent
Walter Lowrie
Robert Masters
Bryan Lones
Travis McClure
Marc Schroeder
Phillip Bartlett
Glen Wattrus
Leona Trollip
Leonie Schoeman
(RFP™, MIFM) - ManagingDirector and Private Wealth Manager, 23 yearsexperience;
(BCom, MIFM) - ExecutiveDirector and , 18 yearsexperience;
(MIFM) - Executive Director andShare Portfolio Manager, 16 years experience;
- , 26years experience;
(AFP , MIFM) -, 26 years experience;
(AFP , MIFM) -, 20 years experience;
(BCom, CFP ) -, 12 years experience;
(BCom Hons(Ecos), CFP ) -, 7 years experience;
(BA LLB, -, 9 years experience;
(B.Juris LL.B CFP ) – Private WealthManager, 14 years experience;
(RFP ) - Employee BenefitsDivisional Manager and Advisor, 35 yearsexperience;
- Healthcare DivisionalManager and Advisor, 14 years experience;
NFB has a separate specialist Short TermInsurance Division, as well as now offeringspecialist group companies in the fields of stockbroking, wills and the administration ofdeceased estates.
®
Private Wealth Manager
Private Wealth Manager
™ Private WealthManager
™ Private WealthManager
Private WealthManager
Private Wealth Manager
CFP ) Private WealthManager
(CFP ) - Regional Manager – PE,6 years experience;
(BCom (Hons), CFP ) - PrivateWealth Manager, 2 years experience;
™
(RFP™)
®
®
®
®
®
Gordon Brown
Mikayla Collins
NFB have a
with a between them:
STRONG, REPUTABLE TEAM OF ADVISORSWEALTH OF EXPERIENCE
25
NVest Securities (Pty) Ltd
NFB House, 42 Beach Road,
Nahoon East London 5241
PO Box 8041, Nahoon 5210
(043) 735-1270,
(043) 735-1337
Tel:
Fax:
Email:
www.nvestsecurities.co.za
The Eastern Cape's first home-grown
STOCK BROKERAGE
sensible finance nov12