Following two years of significant financial uncertainty, investors are increasingly focusing on ensuring that they have enough savings to ride out financial storms, to provide for their future and investing for impact to ensure there is a future to save for.
“As investors increasingly question the investment practices of the past and re-evaluate the concept of meaningful contribution, we believe in rethinking returns and investing for impact,” says Marthinus van der Nest, head of Amplify Investment Partners.
“At a time when there is so much economic pressure, investment considerations are increasingly including environmental, social and other societal issues and how they can contribute.”
This requires, first and foremost, the ability to increase savings, which is top of mind currently during savings month, especially as the pandemic years have illustrated how crucial it is to ensure our own financial stability in case of hard shocks.
They also illustrated the importance of riding the storm when it comes to investment.
Amplify’s strong performance across its unit trusts and hedge funds over the past two years highlights the importance of riding the storm as the recovery of the JSE and major global indices was relatively swift.
Even if cyclical recovery is slow, recent experience provides evidence of the importance of remaining true to your long term savings goals. Panicking and selling into a dip is almost inevitably counterproductive.
“We continue to experience uncertainty and volatility, and this does make people concerned, but agile asset managers have proven they can be trusted to navigate storms.”
“Keeping a cool head is the cornerstone of investing, and agile and responsive fund managers are better able than individual investors to keep a cool head as they have the experience and the tools to protect on the downside and continue to find opportunities. “
These are often presented in mispriced assets not available to larger managers, and investors are increasingly relying on boutique managers that have a relatively large investible universe to find upside opportunities.
For most savers, multi-asset unit trusts are accessible as they are relatively low cost and diversified as they include equities, bonds and money market instruments. Selections of the type of unit trust need to be based on personal goals, relative risk appetite and cost.
Investors should, if possible, look at hedge funds, which can make use of short-selling, leveraging, and derivatives to provide an additional source of diversification and improve the overall risk profile of a portfolio.
It is increasingly important to grow retirement savings and leave a legacy and making a meaningful impact on surrounding communities.
“We help our clients save and prepare for the future and want to play a role to ensure the future is worth saving for. For us, saving for the future means leaving a better world for future generations,” van der Nest says. This is embodied in Amplify’s support for conservation, job creation and youth education projects.
“We believe that when you know you are saving for a goal or purpose, you will be reluctant to sell out and will have a more level-headed and longer-term approach to your investment.”
This attitude has helped Amplify consistently outperform its peers since its launch in September 2018 and grow assets under management by over 275%.