Thoughts and Reflections on 2020 from Sanlam's CIO Phil Smeaton...

1)     What have you learned about yourself during this period?

It’s been a very strange period because even in lockdown, I’ve discovered some great new ways to spend my time. Being able to take my running more seriously has given me a chance to get out of the house and mull over thorny problems. I haven’t become a complete health nut though; brewing beer and baking bread was also a big part of my lockdown and will be occupying my weekends in the future.

In terms of work, I appreciate how conversations have become much more task focussed. Investment is precise and working over Zoom and Teams has focussed the team; conversations tend to be much more direct and to the point, as much as I love a water cooler chat!

2)     What has this period made you question that you took for granted?

I know I’ve just advocated for how lockdown has forced us to be more task focussed, but the collaboration of an office has been missed. I manage Sanlam’s Multi-Asset Funds, pooling all of our best investment ideas into one package, and being able to get Mike Pinggera’s insight on the latest renewable energy news or shout across to Andrew Evans for his view on a UK company is hard to replicate, even if it does mean that there is a bit of harmless chit chat. Being able to bounce ideas off each other is something that usually leads to better outcomes, and this has required us to hold regular structured meetings in which to share ideas rather than the usual shouting across the office floor.

3)     What mistakes have you seen investors make during COVID?

This goes back to the adage, “Time in the market will always beat timing the market”. My job is to worry on behalf of our investors, and to hold my nerve on their behalf. In March I saw far too many managers outside of Sanlam being too loss averse. I know it’s counterintuitive, but when there are serious pull backs, investors should be looking for new ideas to take advantage of. Those who sold at the bottom and did not buy back in missed out on a remarkable recovery.

4)     What has kept you smiling when markets have been choppy?

Luckily my team of assistants (my three young children) have kept me on my toes. I can’t tell you how many webinars or meetings of mine have been interrupted by having to get up and close the door, but they have really helped me to keep things in perspective. My youngest son has even taken an interest in what I do and is hypnotised by my Bloomberg screen, although he told his teacher that I run “a money hotel”… perhaps it will be a while yet before he sits the CFA.

5)     What do you think will be the biggest change in a post-Covid world?

I think that monetary and fiscal policy will continue to be a crutch for markets for the foreseeable future. To that end, I think that we will be living with consequences of government generosity far after the virus is destroyed.

Closer to home, I think the pandemic has given us a chance to reflect on life and what it means to spend time with our loved ones. Where once Sunday lunch at my mother in law’s may not have been the highlight of my social calendar, I am now keener than ever to spend time with family and to make every moment with my loved ones count.