OPINION: Investing through the global chaos

JOHANNESBURG – Geopolitical issues, a global trade war, local political uncertainty and a struggling economy have made it difficult for investors to navigate investment markets.

It seems chaos is the new norm, and South African consumers are struggling to balance their budgets as inflation rises, food prices are increasing, the petrol price is at a record high and household debt levels remain elevated.

When there is “doom and gloom” all around, what should investors do when things around them seem to be in chaos?

Proceed to Source : IOL

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Liberty enhances governance of its Unclaimed Benefits Funds

Liberty Corporate is pleased to announce the appointment of Mr Douglas Maila and Mr Jerry Mnisi as independent trustees of the group’s Unclaimed Benefits Funds (the Funds). These highly respected individuals bring with them a wealth of industry experience and will enhance the corporate governance of the Funds.

Mr Maila is a well-known and esteemed former unionist who served as a member elected trustee of the Kimberly Clark Provident Fund for 15 years. He has been instrumental in highlighting the plight of retirement fund members and has played a role in educating communities on unclaimed and unpaid retirement fund benefits.

Proceed to Source : FANEWS

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How to stop your living annuity coming to an end before you do

Retirees make mistake of adjusting income drawdown to inflation not to investment returns.

Many retirees are attracted to living annuities as an option once they retire. Living annuities have many advantages: they offer flexibility of investment choice, you choose how much income you want to draw within certain limits, and your investment can be bequeathed to your beneficiaries on your passing.

However, they offer no longevity protection, and it is not uncommon to read about living annuitants being left destitute and having to rely on the government or family for an income in their old age.

Proceed to Source : BusinessLive

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Fund managers and their fees

The growing international popularity of tracker funds helps to explain why SA investors are paying more.

The SA fund management industry is sophisticated, professional, internationally adept … and expensive. The question is whether this expense is justified and if not, are the costs of investing the hard-earned cents of retirees coming down?

In some ways, the second part of the question is the easiest to answer; costs are coming down and respectably fast. Part of the reason is that the SA industry is tightly bound to trends in the international industry, and the megatrend internationally has been a drop in the cost of investing.

Proceed to Source : BusinessLive

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Amendment to tax law will inhibit saving, investment body warns

An amendment to the Income Tax Act proposed by the Treasury would have a negative effect on saving in SA, the Association for Savings and Investment SA (Asisa) argued in parliament on Tuesday.

“It will undermine policy consistency, negatively differentiate SA from collective investment scheme taxation in other jurisdictions, encourage withdrawals in favour of less regulated saving and promote externalisation to foreign collective investment schemes,” Asisa deputy chairman Thabo Khojane said in a submission to parliament’s finance committee during public hearings on the draft Taxation Laws Amendment Bill.

Proceed to Source : BusinessLive

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The fight against Gupta Inc moves to the computer server rooms of Regiments Capital

A civil seizure warrant is being executed on the premises of Regiments Capital, the financial services company accused of being central to the Gupta wave of State Capture, for contracts and electronic records relating to payments to a Bank of Baroda account, any communication with members of the Gupta family or their kingpin, Salim Essa and various “supplier development partners” and Gupta front companies.
The Transnet Second Defined Benefit Fund obtained an Anton Piller order at the High Court in Johannesburg that allows for a wide-ranging search and seizure of key “evidence” in its ongoing legal case against several companies in the Regiments stable.

Scorpio has confirmed that commencement of the execution of the order has begun at at the Illovo, Johannesburg, office of Regiments under the supervision of a court-appointed independent supervising attorney. Regiments declined to comment. The search is restricted to business hours.

Proceed to Source : Daily Maverick

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Unit Trusts: The Next Tax Target?

Treasury has proposed legislation on taxing Collective Investment Schemes (CIS), more commonly known as unit trusts. The tax amendment aims to tax realised profits (made from selling an asset) that were generated within 12 months of the purchase of the asset/instrument. These profits will then be distributed to investors and taxed as income.

The current situation
There has been a debate about the unequal treatment of tax between CIS and other industries. The profits that individuals or other industries generate are taxed as income if the asset was held for less than 12 months (deemed profit in nature) and as capital gains tax for longer investment periods (seen as capital appreciation from long-term investment). An investor putting money in a CIS would have only been liable for capital gains tax on redemption of the investment, thereby taxing both short term and long-term profits as capital gain. This is significant since an initial amount of capital gain is exempt from tax and the excess is taxed at a lower rate, 40% of the marginal income tax rate.

Proceed to Source : ShareNet

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The hedge fund issue isn’t just about returns

Sygnia’s decision last week to close all of its hedge funds has raised important questions about this industry. What are hedge funds supposed to do, and how should investors judge whether they are delivering?

In particular, many investors have been asking how you should measure their performance against traditional unit trusts. Since balanced funds are also designed to manage risk while delivering returns close to the stock market, are they directly comparable?

While this may seem logical, Werner Opperman from 27four Investment Managers says that contrasting these strategies against each other may not be entirely the right approach.

Proceed to Source : MoneyWeb

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SA Post Office in hot water over R200m Postbank transfer

Mark Barnes, chief executive of the SA Post Office (Sapo), has been summoned by the telecommunications ministry for allegedly dipping into the coffers of its subsidiary, Postbank, and transferring R200m to Sapo to pay creditors.

Minister of Telecommunications and Postal Services Siyabonga Cwele has called Barnes, Post Office officials and the chairpersons of the two entities – Phumzo Noxaka for Postbank and Sapo’s acting chair, Zibuse Comfort Ngidi – to a meeting tomorrow. This after he was alerted to the matter by a City Press enquiry.

Proceed to Source : News24

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The fundamental difference between money market and income unit trusts

The fundamental difference between money market and income unit trusts

A Fin24 user wants to know what the fundamental difference is between a money market unit trust and an income unit trust.

He writes:

What is the fundamental difference between a money market unit trust and an income unit trust?

They publish different returns and costs, but is the difference expected growth (low) in an income fund against very little growth in a money market unit trust.

Proceed to Source : Fin24

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