If you’ve been following our recent series, we’ve dived deep into the worlds of Hedge Funds and Active Management. But a fundamental question remains for every investor: Should you pay for a professional to “beat the market,” or simply aim to “match the market” at a lower cost? Understanding the trade-offs between Active and Passive management is key to building a portfolio that actually works for you. The Strategy: Hands-On vs. Hands-Off Active Management: Think of […]
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Picking a Winner: How to Evaluate Active Funds
In our previous post, we explored how actively managed funds can provide agility and the potential for higher returns. However, the success of an active strategy depends heavily on the skill of the manager. Not all funds are created equal, and “fee drag”—the impact of higher management costs—means you must be selective. Here is how to evaluate whether an active fund earns its place in your portfolio. 1. Look Beyond the Track Record While historical performance […]
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The Case for Active Management: Beyond the Index
In a world where “set and forget” passive investing often dominates the conversation, many investors overlook the strategic advantages of professional oversight. While passive funds aim to replicate market performance, actively managed funds strive for something more: outperformance. What is Active Management? At its core, active management is about human expertise. Unlike passive funds that simply track an index, active managers take a hands-on approach. They analyse market trends, economic data, and company fundamentals to hand-pick […]
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Hedge Funds in South Africa
After attending an international conference in Australia, I realised how little is known about Hedge Funds in South Africa. As part of my supervision for a CAT II license*, we have spent time on hedge funds. This article is to give you insight in the use of Hedge funds and what the risk return for investors. Hedge Funds: Understanding Their Role in Client Portfolios and the Returns vs. Risk Trade off Introduction Hedge funds have long […]
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The Two-Pot Retirement System
Newsflash: Very important! The two pot (actually three pots) retirement system becomes effective from 1 September 2024 and is applicable to pension-, provident-, retirement annuity-, and preservation funds. In other words, to pre-retirement funds. 1. Savings pot From 01/09/2024 one-third of contributions are allocated to this pot, which can be withdrawn once a year at any time before retirement, subject to tax. Withdrawals can only be made if the member has a tax number. The savings […]
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The importance of a Life File
What is a life file and why does everybody need one? Our world is fast changing especially because of the COVID-19 epidemic of the past number of years. We have become a lot more aware of our mortality – more so than most could have ever imagined before this pandemic. We face an uncertain future. Political upheaval and financial uncertainty are adding to our stress. At EFS we believe these factors present an even more compelling […]
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A living will
A living will is a legal document that sets out your wishes for your healthcare when you cannot share them yourself. It guides your family and healthcare providers when you are not in a condition to make decisions or express your wishes. The document gives instructions for not being kept alive through expensive life-support or other artificial medical interventions when there is no hope of recovery and death is inevitable – for example, if someone is […]
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The importance of a will
Holistic financial planning should ideally be done in a specific order. In a recent blog, we wrote about temporary and permanent disability income protection as the foundation of a sound financial plan. The next component is a will. It is estimated that approximately 70% of working South Africans don’t have a will. If you don’t have a will you die intestate which means that the Intestate Succession Act determines who inherits what. This should be avoided! […]
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Why you need life cover if you have a bond
When applying for a home loan, one vital aspect to carefully consider is life cover or mortgage protection cover. This will ensure that you can continue to provide your dependants with a roof over their head if you pass away, or become disabled and cannot work. If you are the main income earner, but don’t have appropriate life cover or mortgage insurance, you could leave your family in a world of financial hardship after your death, […]
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Business assurance matters
It is highly advisable that anyone who runs their own business takes out business assurance, which is a broad term for a range of life assurance products that are designed to cover various scenarios and requirements. Running a successful business often takes considerable financial investment, but many business owners fail to plan for what happens in the event that they die, become disabled or severely ill; or if they lose one of their key employees for […]
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