As we navigated the first five months of 2025, the adage 'this too shall pass' has proven true. This timeless wisdom reminds us that market fluctuations, whether bullish or bearish, are temporary. By adopting a values-driven approach, we can maintain a long-term perspective, ignoring short-term volatility. In the face of current geopolitical uncertainty and market nervousness, our investment philosophy remains steadfast. At Old Mutual Wealth, we emphasise the importance of adhering to a well-crafted long-term plan and investment strategy. History has consistently demonstrated that staying invested, whether in assets, education, or personal development, yields favourable outcomes.
As a result of the noise, the first quarter of 2025 saw heightened volatility in global markets. The main player was President Trump with his Liberation Day speech and subsequently, reactions from US trading partners such as Europe, China, Canada and others, including South Africa. But of course, the position taken on Liberation Day soon passed when the US announced on 12 May that tariffs against specified countries will be suspended or reduced for a 90-day period, whilst the US negotiates.
Locally, the Government of National Unity (GNU) faced its first big challenge after two failed Budget Speech attempts by the Minister of Finance. Although the third iteration was a delicate balancing act, the budget impasse passed through some spending cuts, maintaining investment and compensating for the foregone revenue from scrapping VAT.
The good news is that consumers with debt are likely breathing a collective sigh of relief since the repo rate was cut at the end of January and then again in May, taking the prime lending rate to 10.5%. However, the turmoil stemming from the global tariff war means that further rate cuts may be fewer and later than anticipated.
Our hedge funds keep winning
In our commitment to provide relevant and diverse investment solutions to help our clients manage investment market volatility, I am very proud to share that the Old Mutual Multi-Managers Long Short Equity Fund of Hedge Funds, a specialist fund, was named the Best Fund of Hedge Funds over five years. This marks the seventh consecutive year that the fund has won an award and brings Old Mutual Multi-Managers’ total HedgeNews Africa Awards to 14!
New hedge fund – accessible to retail planners
Having successfully managed hedge fund of funds’ portfolios for institutional clients for nearly 20 years, we’re excited to now offer the same expertise to retail investors. We have launched the Old Mutual Multi-Managers Diversified Retal Investor Hedge Fund of Funds – an offering aimed at a broader investor base who are looking for diversification and downside protection.
Generating wealth in a tough economy
As the market's pendulum swings, we encourage you to remain focused on your long-term objectives, rather than being swayed by short-term market sentiment. By doing so, you can ride out the inevitable market cycles and stay on track to achieving your goals. Successful investors know that long-term wealth is built on patience, discipline, and a commitment to staying invested. Remember, “this too shall pass”.
Thank you for your continued support and partnering with us on your wealth journey.