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Diversification adds value

by Suzette van Niekerk

The current bear market is turning into a once-in-a-few-lifetimes event! Most has failed due to the extremity of this event, which shows significant similarities to the 1929 and 1960s periods.

One of the basic principles that has stood the test of time is diversification (or: do not put all your eggs in one basket). This is also the underlying approach of a Fund of Funds (FoF), which we recommend. It is difficult to select the top performing asset class each year, but a diversified portfolio can help mitigate risks.

Model of best to worst performers

See graph above – best performer is on top, and worst at bottom of graph.

The Select Manager Fund of Funds stood proud over these difficult times. For the term ending February 2009:

  • the Select Manager Money Market FoF was number 1 of 27 funds;
  • the Select Manager Cautious Managed FoF was number 8 of 61 funds;
  • the Select Manager Prudential Active FoF was number 12 of 47 funds;
  • the Select Manager Flexible Growth FoF was number 20 of 68 funds
  • the Select Manager Defensive Equity FoF was number 8 of 11 funds;
  • the Select Manager Global Growth FoF was number 14 of 38 funds.

We have outperformed most of our competitors.

For more information about the above-mentioned funds, please contact Financial Planner Suzette van Niekerk (BCom LLB CFP FSP 4635), Exceed Private Client Services (Pty) Ltd on 021 852 0382.