What is impacting the investment landscape?

By: Ferdi van Heerden, Chief Executive Officer at Momentum Investments

Ferdi van Heerden

Looking at the current investment landscape, there are quite a number of key themes and factors that investors should consider and focus on.

The first two themes are the changes in the macro and micro economy. Microeconomic factors such as supply and demand, taxes and regulations, and macroeconomic factors such as economic growth, inflation, and interest rates, have a significant influence on different sectors of the economy and your investment portfolio.

Rising inflation and interest rates affect people’s cost of living, locally and globally, meaning more and more people have less discretionary funds at their disposal to spend, let alone invest.

Geopolitical uncertainty is another pertinent factor, given the wars in Ukraine and the Middle East, and other rising tensions around the world.

All of the above factors require investors to take a balanced view with a diversified investment portfolio, to navigate the challenges in the environment.

We are also witnessing a technological revolution with significant developments in artificial intelligence, blockchain and cloud technology, behavioural sciences, and digitisation. The opportunity that these technologies introduce are massive in terms of effectiveness, efficiencies, and investor connection.

From the young investor to the seasoned, it is easy to become overwhelmed and even panic a little in the face of all these moving pieces that drive investments, but good advice from a financial adviser will help alleviate concerns, especially with a long-term investing plan.

Finally, climate change has been a “hot” topic for a long time with mounting pressure from governments, regulators, trustees of pension funds, and increasingly from clients, requesting investments that are geared toward a sustainable future.

Environmental, social and governance (ESG) factors are high up on our agenda at Momentum Investments. We believe in an integrated responsible investment philosophy, taking all ESG factors into account when making investment decisions. Our commitment towards ESG is amplified by being a signatory of the United Nations principles for responsible investments. To safeguard against longer-term social impact from short-term choices, we support and align to the “Just Transition” guidelines of the international labour organisation.

A key principle for us at Momentum Investments is to engage with our investee companies and third-party managers, to ensure there is an alignment on common ESG-related values; to positively influence how these companies and managers run their affairs and operations, and make capital investments towards a better sustainable future.

Through our thematic funds, we also seek out specific investments that are focused on renewable energy sources.

An example of this is our investment in the Ilangalethu Karoshoek concentrated solar power plant in the Northern Cape. It provides clean electricity to power homes, provides jobs, and contributes to carbon emission reduction.

We have also invested in the Umoya wind farm in Hopefield in the Western Cape. It not only provides clean, renewable energy but is also working to help develop one of the most historically disadvantaged communities.

Watch our video on the Karoshoek solar power plant here. You can also watch our video on the Umoya wind farm here. To read more about our responsible investing practices, visit our responsible investing page here.

Momentum Investments is part of Momentum Metropolitan Life Limited, an authorised financial services (FSP 6406) and registered credit (NCRCP173) provider.

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