“Cash gives optionality in a volatile environment and also serves as a means to reduce volatility,” says Kurt Benn, Head of the Absa Balanced franchise. These are wise words as a cash buffer is tactically sound, in a world where greater nimbleness is required. As assets re-rate and buying opportunities arise the cash holding will come into good use.
Kurt Benn and his co-portfolio manager, Greg Kettles were the guest speakers at our monthly Cape Town and Johannesburg External Distribution Channels (EDC) client lunches. The two have over 40 years of collective experience and this wealth of experience is demonstrated by their depth of knowledge across the board.
When asked what their main concerns are, they are worried about the potential of trade wars and what that will mean for emerging market economies. They are also deeply concerned about global liquidity as the major economies begin to shrink their balance sheets and quantitative tightening is the new order of the day.
Tsitsi Hatendi-Matika is Head: Retail Investment Specialist at Absa’s Wealth and Investment Management unit.