A parking strategy in a conservative portfolio
Given the continued uncertain economic environment, investors that are unsettled by poor investment returns, or who rely on a steady income from their investment, should consider our conservative investment portfolio. This is a portfolio with a high allocation to capital preservation assets (cash & bonds) and a small allocation to growth/risk assets (equities & property), targeting inflation plus 3% to 4%.
Even investors with a higher risk profile could consider this parking strategy in a conservative portfolio until we foresee a more stable environment and better market opportunities. With this approach, the risk/growth allocation will be increased over time to produce a higher return.
Conservative Portfolio construction
Our conservative portfolio incorporates a diversified asset allocation with four selected fund managers that have strong fundamental investment processes, but varied market views. This ensures lower risk and limits the chance of downside losses as a result of concentrated mistakes.
The portfolio’s asset allocation is as follows:
Portfolio historic performance
Over the last four years, the recommended income portfolio has produced an annual average 8.7% return versus the JSE’s total return of 5.4% and Rand/Dollar of 3.1%
Portfolio funds’ performances
Prosperity Worldwide Flexible Fund of Funds:
One of the four recommended funds is the Prosperity Worldwide Flexible Fund of Funds, which is co-managed by Investonline director, Nick Brummer. The fund is a good representative of our house views as it invests in various asset classes around the world. The fund has produced a steady 9% p.a. return since inception, September 2014.
