Why Investors are Flocking to Balanced Portfolios, ESG Funds, and Domestic Equities

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Published on: Oct 1, 2024 3:00:00 PM

The South African unit trust industry is undergoing a transformation, as highlighted by Adriaan Pask, Chief Investment Officer at PSG Wealth, in a recent podcast discussion with Ciaran Ryan. Investors are shifting their focus toward balanced, multi-asset portfolios, ESG-compliant funds, domestic equities, and increasingly, actively managed ETFs.

So, what’s driving these shifts?

The Balanced Portfolio
Adriaan Pask emphasizes that many investors are moving away from high-risk strategies and embracing balanced, multi-asset portfolios. These portfolios blend stocks, bonds, and other investments, offering smoother returns in volatile markets. The key here is stability, as these portfolios allow investors to ride out market fluctuations while still pursuing growth.

This balanced approach has the potential to offer a secure path forward, helping investors manage risk while aiming for reliable, steady returns.

For these types of portfolios, you may want to consider exploring our funds from EasyAssetManagement. The EasyAssetManagement Enhanced Balanced is available in your ZAR wallet, and the EasyAssetManagement Core Balanced Fund can be accessed in both your ZAR and TFSA wallets.

Balanced Portfolios

ESG-Compliant Funds: Investing with Purpose
Ciaran Ryan notes the rising demand for ESG (Environmental, Social, and Governance)-compliant funds. These funds go beyond profit margins—they align investments with personal values. Investors are increasingly drawn to ESG funds, which support companies committed to environmental sustainability, social responsibility, and strong governance.

This trend is gaining global momentum, and in South Africa, it’s no different. Pask adds that ESG funds aren’t just an ethical choice—they’re often smart financial plays, as companies with strong ESG practices tend to deliver sustainable, long-term growth.

To explore ESG ETFs on our platform, you may take a look here.

Domestic Equities: Betting on Home Turf
Investors are also showing renewed interest in domestic equities. According to Pask, in times of uncertainty, investing in local markets offers an added layer of security. By focusing on well-established South African companies in industries like retail, banking, and telecom, investors can leverage the strength of the local economy while minimizing the volatility associated with global markets.

This focus on home-grown companies ensures that domestic equities are becoming an essential part of many investors’ portfolios.

Actively Managed ETFs: Flexibility Meets Expertise
Finally, actively managed ETFs are rising in popularity, giving investors access to professional management with the cost efficiency of ETFs. These funds allow managers to make tactical decisions to outperform the market.

Adriaan Pask highlights that actively managed ETFs provide a flexible, dynamic approach, particularly appealing to investors seeking a balance between cost-efficiency and expert oversight. As market conditions fluctuate, actively managed ETFs can respond quickly, making them a valuable tool for investors who want to capitalize on market trends without being locked into passive strategies.

What Does This Mean for You?
The insights from Adriaan Pask and Ciaran Ryan highlight the increasing significance of balanced portfolios, ESG funds, domestic equities, and actively managed ETFs. These trends are redefining the future of investing by combining stability, sustainability, flexibility, and local expertise. Whether you are a novice investor or have extensive experience, these strategies provide a guide to constructing a robust, future-oriented portfolio.

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Any opinions, news, research, reports, analyses, prices, or other information contained within this research is provided by an external contributor as general market commentary and does not constitute investment advice for the purposes of the Financial Advisory and Intermediary Services Act, 2002. First World Trader (Pty) Ltd t/a EasyEquities (“EasyEquities”) does not warrant the correctness, accuracy, timeliness, reliability or completeness of any information (i) contained within this research and (ii) received from third party data providers. You must rely solely upon your own judgment in all aspects of your investment and/or trading decisions and all investments and/or trades are made at your own risk. EasyEquities (including any of their employees) will not accept any liability for any direct or indirect loss or damage, including without limitation, any loss of profit, which may arise directly or indirectly from use of or reliance on the market commentary. The content contained within is subject to change at any time without notice.

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