Many South Africans fear an economic or political calamity. They fear being financially trapped and having hard-earned assets depreciate in US dollar terms. Moreover, they feel powerless to do anything about it, leaving many with high degrees of anxiety over SA's uncertain future. Emigrating capital is not easy to do, and sometimes impossible when assets are needed for income generation and are immovable, such as buildings, farms or businesses.
Equally, relying on traditional instruments such as Forward Exchange Contracts is inefficient, while the outright use of options is expensive. Furthermore, using such instruments without the strict discipline of a quantitative system renders such behaviour, speculative.
As the saying goes, “hope is not a strategy” and something more practical and manageable is needed to mitigate the risk of political and economic uncertainty and the prospect of a sharp devaluation in the rand.
The ultimate objective of the ZAR Strategy is to enjoy living in South Africa with all its benefits, but limit the financial risk of doing so by ensuring that locally domiciled assets are protected in US dollar terms.
Traditional markets are sub-optimal in protecting against currency, economic and political uncertainty. First prize would be to mitigate risk through a strategy that is uncorrelated to traditional domestic investment markets. That is what the ZAR strategy aims to do and it will do so in a dependable and repeatable manner.
Click the following link for a more thorough introduction to the ZAR Strategy
ETM Capital together with Star Investment Partners oversee three life-staged investment portfolios that aim to achieve inflation-adjusted real returns. The return objectives differ according to the age of the contributing member and the risk profile inherent with the variability of return over the medium to longer term. The differentiating factor in these portfolios is that the asset class weightings are arrived at through the use of ETM’s proprietary models and research, making the positioning fairly unique and robust.
The funds have a track record of well over ten years and returns have consistently been in the upper quartiles of the market.