Eben Louw

Global markets look increasingly vulnerable to geopolitical and geo-economic shocks, as well as earnings disappointments. Although the most recent earnings season showed resilience, equities are facing elevated hurdles amid extreme growth expectations. The tech and AI boom is likely to continue driving performance, but will be under increased scrutiny given elevated valuations and unprecedented levels of capex. Global liquidity is still relatively supportive at least, and growth continues to surprise, with some additional tailwinds over the coming year.

Locally, the equity rally has been very narrowly driven, predominantly by the gold and platinum miners. Locally-focused companies remain relatively muted and priced for little growth, setting a low base for positive surprises. The impact of reform progress on activity and sentiment, along with lower inflation expectations and lower borrowing rates, is likely to support returns going forward.

We remain close to neutral on growth assets and maintain well-diversified portfolios. We have added some additional value exposure in the portfolios, and continue to tilt towards active management in the current environment.