STEPHEN CRANSTON: The pain of poor returns
Absolute return managers need to feel real pain if they lose even R1 of client cash
With a synchronised fall in all the major SA investment indices, it is easy to get disillusioned. Experts at asset allocation have not been able to preserve capital whether they put clients in property, domestic equity, sovereign bonds or inflation-linked bonds.It must be particularly hard for Errol Shear, one of the pioneers of absolute investing. Shear ran absolute return funds at Stanlib and Absa Asset Management for 15 years, and joined Sasfin a few years ago.At the virtual Meet the Managers conference in August, he set out the stall for the PPS Defensive Fund, which he runs on behalf of the Professional Provident Society. Absolute returns might be superficially similar to stable funds, but absolute managers need to feel real pain if they lose even R1 of client cash. Though I believe Shear is not a Catholic, he takes part in self-flagellating ultramarathons to cleanse himself of the guilt he feels losing client money.But he hasn’t had to be that hard on himself. A Shear-managed ...
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