Peter Brooke 00:00
Good day. My name is Peter Brooke, and I'm a Portfolio Manager at the Old Mutual Investment Group. This is Macro Perspective 50 of 2021 and is the final one of the year. One of the best meetings we do as a team is our "Friday Flurry", where we appreciate our colleagues for their help in the week. So, this podcast will focus on what I'm grateful for in 2021.
00:21
The first appreciation is for good health. In the wake of a pandemic, which has tragically killed more than 5 million people, the survivors should appreciate life even more, and I certainly do. Link to that, I deeply appreciate modern science, which has created effective vaccines, allowing all of my family to have had their two shots, apart from my dad, who's already on number three, having had a booster.
Regarding Omicron, I think it's too early to say with certainty, but the data is clearly showing despite the very high rate of infectiousness, the link between positive results through to ICU is running at about 15 times less than what we were seeing with Delta. So, there's a possibility that we have Joburg already reaching a peak in terms of positive rates, and that with a lower ICU incidence, that South Africa might be one of the safest places in the world in January for Covid.
01:23
The second appreciation is for wealth. This has been another good year for equities, both locally and abroad. Plus, there was a big recovery in property. Overweight in equity and underweight in cash boosted our solution returns, while good selection in MTN, Sasol, and SA small caps from the research team meant we beat the market. The combination resulted in excellent returns over the last year.
And if I look at the 12 month returns from my funds, they were both 25% for Old Mutual Flexible and Old Mutual Maximum Return. I appreciate all of my colleagues, who helped me deliver these returns. More importantly, these good returns have pulled up longer term numbers in real terms. So, if I look at those same two funds and strip out inflation and look at the three year period, the growth from Old Mutual Flexible was 8.8% real and 10 and a half percent for max.
Growing real wealth is a critical support for many people who have battled with the economic effects of Covid. Our industry has been very lucky to keep working compared to many other businesses.
02:30
The final appreciation is for happiness. I remain delighted to work in Cape Town, which is one of the most beautiful cities in the world. I work in a great team. We've just completed our first year as a merged business, having brought in our equity team. And this has both improved our client outcomes and the culture response from the team has been great if we look at the survey numbers.
To be fair, I wouldn't say I'm exactly delighted by the pace of reform. But at least South Africa has stopped its race to the bottom. Allowing the private sector into electricity remains a massive positive and they will improve the situation. My wife certainly is happy that we will have a solar installation in the new year. Finally, I'm happy that my brain is fully engaged with the challenge of markets. Looking ahead into next year, which you've just spent the last month doing, it is going to be a challenging year, and meaningful work is a blessing.
03:24
So, in summary, I appreciate a good year for health, wealth, and happiness, and wish the same for everyone else in 2022. I also want to thank any listeners of these perspectives over the last year and we will restart in January. All the best for your break. Thank you.