Yesterday I spent three hours listening to three fund managers from Prudential and then to Trevor Manual, who was their guest speaker. The three Prudential guys were good to listen to. A mixture of characters as well. The first was a Zulu actuary, the second a Greek actuary and the third a thorough Afrikaner. He didn’t tell us his academic background. They were delightful as they played on each other. Speaking last, Trevor Manual was well positioned to get on this band wagon too. A few points to mention, because there are always too many to write.
The Zulu chap spoke on the downgrading issue. Should we panic? He likened it to understanding our own credit rating and whether a bank would find it favourable to lend to us, to me, to you. Hence if South Africa is downgraded who would want to continue lending and investing in our country.
The Greek guy spent some interesting time talking about Human Capital and then Financial Capital. The movement, allocation and use of these.
The most common question the Afrikaner said he got from clients or advisors was around the Rand: where it is going. His answer was, ‘I don’t know and will never know and no-one can ever tell you.’ And he’s right. All fund managers tell us this, that they have no idea. He went on to talking about having enough offshore exposure in client portfolios. What was very interesting was that he showed us just how much of the revenue stream of the JSE All Share Index was made up of non-South African income. Put another way, how much of the revenue coming into South African listed companies was from other countries. He then explained that in effect, people have a greater offshore exposure than they thought. Where a typical Balanced Fund might have 27% offshore – the maximum amount allowed in these funds being 30% – the effective economic non-SA exposure, was more like 49%.
Trevor Manual was good to listen to. Intelligent, articulate and with a good sense of humour. He had a number of points he wanted to talk through, some picking up on what the Prudential guys had spoken about but also his own thoughts on some global matters. Question time brought on questions of a more political nature, which he answered very carefully. But he was great to listen to. Still involved with underprivileged communities on the Cape Flats, which was interesting to know.