“As we have noted for some time, there is pervasive fear in certain parts of investment markets. This is in complete contrast to other areas that are well owned and in which investors are inclined to be complacent. Markets therefore continue to be characterised by wide valuation divergences,” said Shaun le Roux, fund manager at PSG Asset Management.
“We are finding far more opportunities in those parts where investors are fearful, especially in the SA Inc. part of the domestic market, which has endured tough economic conditions and aggressive selling by foreigners in recent years.
“In fact, our bottom-up analysis is indicating valuations usually seen in deep bear markets. For longer-term investors who can ride out the storm, the return profile from carefully selected securities at such low valuation levels is promising,” said le Roux.
“Equally as encouraging is the fact that the opportunities we’re finding extend across almost all asset classes – a rare position to be in. We believe that this has allowed us to build diversified portfolios with favourable odds of achieving their mandates under a range of possible outcomes.
“We are excited both by the opportunity set, and by the balanced nature of our funds’ investments,” said le Roux.