Perhaps hard to believe, but the first half of this year is already a thing of the past. This provides a good opportunity for investors to reflect on their investment portfolio, and to determine how it has fared so far this year, and more importantly whether they are still on track to reach their investment goals.
For the first six months of 2024, all local asset classes have yielded positive growth – a feat that last occurred in 2019 before Covid-19 hit the markets.? Even all the major international market indices were positive except for the S&P Global Property Index which was slightly in the red.
Overall, the first half of the year has been really good, especially within the current global economic climate of uncertainty and geo-political events. ?Looking at each asset class separately, we need to compare its growth against inflation to determine what real growth there has been.? Keep in mind that only growth above inflation can be regarded as a real value increase.? Inflation in Namibia is currently 4.6% and 5.2% in South Africa:
- Money Market funds continue to yield around 8%, although Treasury Bill rates have dropped over the six months from around 9% to 8.70%.
- Bonds had an outstanding June with growth of 5.2% for the month alone, which largely helped bring growth to 5.6% over the first six months.? The current positive sentiment from SA as a result of their Government of National Unity (“GNU”) has seen bonds perform exceptionally recently.
- Local equities also shared in the GNU euphoria and were up 3% in June alone to bring growth for the six months to a decent 5.1%.
- Listed property was the winner in June with stellar growth of 7% to bring the 6-month growth to 9.2%.? Unfortunately, despite the recent upswing, this asset class is still negative over the past 5 to 7 years.
- Foreign equities are still attractive even though the developed economies, as measured in Namibian Dollar terms were slightly negative for June at minus 0.5%. However, the growth over the last six months stands at a very attractive 9.8%. The international markets were all positive over the first six months of the year with the tech shares running in front.? Both the Nikkei in Japan and the Nasdaq in America were up 19% followed by the S&P500 with 15% growth and the Eurostox with 11%.? The Chinese Shanghai, by comparison, was up only by 2.1% and also the worst global index.
- Commodities for January to June were all positive except for the agricultural sector, which declined by 6.3%.? Oil was once again the winner with 19% growth, followed by copper with 15% and gold up by nearly 13% - all in US Dollar terms.
- Lastly, on exchange rates, the Namibia Dollar strengthened against most major currencies during the first six months of the year and was 3.5% stronger against the Euro, 1.3% stronger against the Pound and 0.6% stronger than the US Dollar.
