Active Vs Passive Investing in South Africa

Pegasus

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Eti1

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Which sygnia are you using, there's a few on their site.
https://www.sygnia.co.za/personal-investments/fund-fact-sheets
They have a 40, 60 and 70, their performance is different over the years, so basically you're cherry picking here.

So when all three are beating AG, you can colour me impressed.
Wtf? You know AG has different funds too? I am almost sure, since you mentioned Balanced funds, that ssb compared the Coro and AG balanced funds to Sygnia 70 (the equivalent of a balanced mix)
 

Pegasus

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Ok sorry then. You mean you want to compare the performance of each Sygnia fund vs a comparable AG fund?

I am sure ssb has nothing better to do.
I've got a few million with AG, if I find a better place to put it then I'll be interested.


I want to make sure that we're comparing the same things.

On a side note:
AG can change their asset allocation whenever they want, but the Sygnia 40, 60, 70 can't.
So basically you're making that decision yourself.
 

Pegasus

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Just a question for the finance guru's here.

You guys do know that these Sygnia 40, 60, 70 ect funds that ypu're punting aren't actually "passively" managed?
 

Eti1

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Just a question for the finance guru's here.

You guys do know that these Sygnia 40, 60, 70 ect funds that ypu're punting aren't actually "passively" managed?
Well, I am kind of aware. The fund managers are actively picking the passive index funds if I understand it correctly.

But they charge a lot lower than true active managers because it surely isn't rocket science. Plus they have some deal with Blackrock iirc.

Edit: And there is nothing stopping active managers from buying passive funds, which they do a little of as well I think. I don't really see your point.
 
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supersunbird

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Just a question for the finance guru's here.

You guys do know that these Sygnia 40, 60, 70 ect funds that ypu're punting aren't actually "passively" managed?
Sygnia can indeed managed the asset allocation levels, but the underlying funds are passive. They don't go, Naspers must be 5% and AMSA must be 1% cause blah blah blah, but maybe can go equity must be 40% and property 20%

I prefer 10X anyway, and they are fully passive.

If I compose my own RA consisting of only index funds, but I decide my asset allocation, and change it at times, it that active or passive?
 
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Pegasus

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Sygnia can indeed managed the asset allocation levels, but the underlying funds are passive. They don't go, Naspers must be 5% and AMSA must be 1% cause blah blah blah, but maybe can go equity must be 40% and property 20%

I prefer 10X anyway, and they are fully passive.

If I compose my own RA consisting of only index funds, but I decide my asset allocation, and change is at times, it that active or passive?
Your underlying holdings / assets are managed passively, the "fund / portfolio" as a whole is active.

You are actively making the asset allocation decision and deciding when to rebalance etc...


There is no "passive" benchmark that can be used for asset allocation, that's the "flaw" with these "passive" funds.
The Active guys tend to use CPI and the "peer average" benchmarks, but you can't use those for passive funds as you can't track it.


You'll notice the different perfomance figures of those 40, 60, 70 Sygnia funds. That should give you an idea of why asset allocation is important.
 

Pegasus

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Well, I am kind of aware. The fund managers are actively picking the passive index funds if I understand it correctly.

But they charge a lot lower than true active managers because it surely isn't rocket science. Plus they have some deal with Blackrock iirc.

Edit: And there is nothing stopping active managers from buying passive funds, which they do a little of as well I think. I don't really see your point.

Well on you're last point, that is what I'd like to invest in.
Asset allocation performed by a decent Asset Allocation Team who use index funds as the underlying assets and at a low cost.

I'm not seeing one I like yet.
 

supersunbird

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Your underlying holdings / assets are managed passively, the "fund / portfolio" as a whole is active.

You are actively making the asset allocation decision and deciding when to rebalance etc...


There is no "passive" benchmark that can be used for asset allocation, that's the "flaw" with these "passive" funds.
The Active guys tend to use CPI and the "peer average" benchmarks, but you can't use those for passive funds as you can't track it.


You'll notice the different perfomance figures of those 40, 60, 70 Sygnia funds. That should give you an idea of why asset allocation is important.
The only real benchmark that counts are the other funds, in my opinion.

Yes, but those fund names are based on the % allocated to equity portion due to equity volatility risk, just like you get the AG Stable fund or the Coronation Balanced Defensive...
 

Pegasus

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The only real benchmark that counts are the other funds, in my opinion.

Yes, but those fund names are based on the % allocated to equity portion due to equity volatility risk, just like you get the AG Stable fund or the Coronation Balanced Defensive...

For peer average :
Fund managers only declare their holdings 6 weeks after quarter end, so you can construct a reasonable benchmark based on that and then adjust it for performance to get an idea of what their asset allocation could be.
It has many, many, many, flaws however, e.g. you're not going to know if and when they rebalance their funds.
 
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