A WORD FROM OUR CIO - PSG

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well as domestic and offshore multi-managed solutions. We not only analyse companies and sectors, but also other fund ma
A WORD FROM OUR CIO Why research is integral to our solutions Adriaan Pask PhD CIO PSG Wealth

I argued in the previous edition of The Wealth Perspective that when it comes to investing, there is no better payoff than the one you get from educating yourself. This holds true for both individuals wanting to ‘do it themselves’ and professionals, like our wealth managers, ‘doing it for others’. There are no shortcuts to successful investing: do the necessary research, study and analysis before making any investment decision – and reap the rewards in the long term. At PSG Wealth, we take the business of helping our clients achieve the best possible outcomes seriously, which is why quality research is one of the cornerstones on which we build our solutions. ”An investment in knowledge pays the best interest.” – Benjamin Franklin

How research fits into our philosophy The investment philosophy that governs our multi-managed approach is based on a few core beliefs: • There are active managers that can consistently beat the market over a portfolio-specific appropriate period. • No manager achieves this goal consistently over shorter periods. • By blending portfolios, short-term underperformance risk can be reduced without compromising on long-term returns. • Competitive fees are the only guaranteed source of alpha (over the short and long term). • Research pays: Markets are ultimately a zero-sum game, and those who have knowledge have power.

A passion for quality research benefits our clients We put a lot of effort into producing not only the best quality research, but also the right kind of research. The research we produce feeds into all aspects of what we do on our platform, helping us to bring you better quality solutions, more accurate recommendations and better performing investment options in the long run. The PSG Wealth research team delivers adviser- and clientfocused research on macro and market trends. Some of the topics we delve into regularly include, among others, financial markets, equities, company analysis, property, preference shares, fixed income, currencies, cash management options as well as domestic and offshore multi-managed solutions. We not only analyse companies and sectors, but also other fund managers out there.

Research pays: Markets are ultimately a zero-sum game, and those who have knowledge have power.

Research reduces risk by making quality products available on our platform By being selective about the unit trusts and securities we make available on our platform, we enhance the quality of our offering to advisers and clients. All our research notes and products comply with our in-house rules. As such, they provide the peace of mind of a quality-controlled and an accurate message. By focusing on the managers in the industry we also provide valuable input into our solution construction process.

Our research helps us construct our solutions As multi-managers, we also seek out and identify skilled managers. Each of our multi-managed funds combines top asset managers who are best placed to make investment decisions for you. When you invest in one of these funds, you tap into the resources, skills and competencies of more than just one asset manager.

Combining specialist skills to achieve specific goals During our research and investment process we identify optimal asset manager combinations to serve specific investment goals. Using specialist skills and processes, we select and combine funds into risk-profiled solutions. We use: 1. quantitative screening to look for persistent characteristics in leading asset managers 2. qualitative due diligence to make sure that our investments are operationally sound. We then combine asset managers and structure our portfolios to optimise the probability of reaching the portfolio’s investment goals.

THIRD QUARTER 2017

A WORD FROM OUR CIO

Our investment and research process

A vote of confidence in PSG Wealth solution funds versus the industry experience

Objective

Compliance Refine or adjust solutions and our strategy

Formulate strategy

Document

Build solution

Evaluate

Archive Implement

Industry

PSG Wealth solutions

Number of months over last 8 years

96

96

Positive net flow months

68 (70.8%)

96 (100%)

Negative net flow months

28 (29.2%)

0 (0%)

Source: PSG Wealth research team

Sources: PSG Wealth research team, ASISA

An extensive fund range to meet diverse needs

A focus on quality research has paid off. The PSG Wealth Moderate Fund of Funds outperformed the peer average over 100% of the 96 rolling 12-month observations over the same period. Assuming a normal distribution, the average balanced fund would only achieve outperformance over approximately 50% of the observations. The increased consistency in fund performance has seen our investors give us a ‘vote of confidence’ in the form of consistently better fund flows than what the industry has experienced.

Our range of PSG Wealth solution funds, which are available via PSG advisers, have been designed around specific investment needs and are tailored to different risk profiles. In the process of finding the best managers, we also negotiate lower management fees on your behalf and bring you solutions that are both well constructed and cost effective, thus ticking another box on our investment philosophy list.

Research benefits our clients in a variety of ways The increased consistency in fund performance has seen our investors give us a ‘vote of confidence’ in the form of consistently better fund flows than what the industry has experienced.

Research is central to our investment philosophy and we pride ourselves on bringing you a range of quality publications and initiatives. Refer to our graphic further on. Whichever way you look at it, leveraging off PSG Wealth’s extensive research capabilities can help you achieve better outcomes.

THIRD QUARTER 2017

A WORD FROM OUR CIO

Insights from our investment research team Clients and advisers

QUARTERLY RESEARCH AND STRATEGY REPORT

DAILY INVESTMENT UPDATE

TRADE IDEA

WEEK AHEAD

Includes market data, economic calendar (local and offshore), product matrix data, highlights from our recent trade ideas and upcoming corporate actions.

Each trade idea provides a recommended portfolio allocation based on the fundamentals of the company, as well as a consensus forecast over the next three years and portfolio and company guidance. These are produced ad hoc.

An overview of market expectations based on the release of company results in the week ahead.

A comprehensive economic report covering a range of markets and research on equities, property, xed income, cash management, currencies, domestic and offshore solutions, as well as feedback from our previous quarterly market survey.

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Advisers

Previous Editions

WEEKLY INVESTMENT INSIGHTS

MONTHLY INVESTMENT INSIGHTS

Includes a Macro note and market commentary (including the best and worst performers).

This report includes a monthly interview with industry stakeholders, our preferred tactical asset allocation, market commentary and product matrix feedback.

The Wealth Perspective provides insights into various industry topics, for example what is disrupting the markets, volatility and where to nd opportunity, how to deal with uncertainty when investing, estate matters and more.

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WEALTH PERSPECTIVE

THIRD QUARTER 2017