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With the markets in disarray in the aftermath of tariffs, it looks like the theme this year is more around risk management in a bear market rather than which growth stocks to buy. Of course, this can change, as markets are volatile and are driven by a number of factors including geopolitics.

This volatility is exactly why diversification is so important. The risk of “diworsification” is ever-present in the strategic asset allocation decision, which is why it ends up being even more important than stock picking.

A quantitative approach to strategic asset allocation is baked into the Satrix Balanced Index Fund and related products. Kingsley Williams, Chief Investment Officer of Satrix, joined me to talk through the key concepts in diversification and the usefulness of a balanced fund.

This podcast was first published on the Satrix website here.

*Satrix is a division of Sanlam Investment Management

Satrix Investments Pty Limited and Satrix Managers RF Pty Limited are authorised financial services providers. Nothing you have heard in this podcast should be construed as advice. Please do your own research and visit the Satrix website for more information on all their ETF products.

Full transcript:

The Finance Ghost: Welcome to this episode of the Ghost Stories podcast. It’s going to be a really interesting one, as they always are. It’s another one with the team from Satrix, but this time we have a guest who you haven’t heard from in a little while, I think, and that is Kingsley Williams. Kingsey is the Chief Investment Officer at Satrix*, so he gets to have some really interesting conversations about broader investment strategies, what it all means for your portfolio and some of the products that they offer at Satrix.

It’s going to be a fun chat. It’s the end of quarter one of 2025 already, shockingly. If you feel like you haven’t made any progress on your New Year’s resolutions, I’m afraid you are a quarter of the way through the year, so better get cracking.

Kingsley, how’s your year going? How are your resolutions tracking? How’s your portfolio tracking?

Kingsley Williams: Yeah, it’s been a wild start to the year, both from a personal perspective – there’s lots going on at home, looking to do some enhancements there, so it’s been busy from that perspective, work is incredibly busy….

The Finance Ghost: …I’m trying to decide if enhancements at home means another room, or having a baby, or buying a better anniversary gift. You can’t leave it there, surely?

Kingsley Williams: Yeah, no, it’s – we’ve long thought about utilising this big space above our ceiling. We have quite a high roof, so we’ve been working on putting a loft in there. Adding an extra room, which has been quite a journey. But an exciting one. An exciting one.

The Finance Ghost: Building is not a joke. Building is not a joke at all. Building a portfolio is arguably easier than building onto your house, I think.

Kingsley Williams: Yeah, yeah.

The Finance Ghost: As you are perhaps experiencing right now?

Kingsley Williams: Firsthand, exactly. Markets have been pretty choppy as well, which I think we’re going to talk a bit about. Clients have been keeping us busy as well. We’ve been speaking at various investment conferences around the country, headed up to Sun City, which I’ll talk a little bit about as well. So, yeah, it’s been wild, but we’re still here. And, as you say, time flies when you’re having fun. We’re at the end of end of Q1 already, but it’s, it’s been really, really busy.

The Finance Ghost: Yeah, Q1 is fairly mental. My side as well, with all the earnings releases on the JSE, but also – well, everywhere actually, but the JSE because it runs on a six-month reporting calendar, you get these crazy busy seasons, whereas the US market is quarterly and does tend to be a bit more steady. It’s just always busy in the US as opposed to locally where there are clearly some very busy times.

And speaking of the US versus local, I had a look the other day. Satrix S&P 500 ETF was down just over 5% year to date. The US market, as everyone knows, has had a bit of a wobbly this year. And the headlines are always full of tariffs this and geopolitics that – that’s obviously not helping. The Satrix 40, which tracks the JSE Top 40, up 8.5% year-to-date when I looked. Obviously those percentages will all be different by the time anyone listens to this. In fact, they’ll be different by the end of this podcast.

But it does show – I mean, that’s pretty meaningful outperformance locally, right? The international one down 5%, the local one up 8.5%. Diversification helping out here, right? Especially because I think the focus has been on offshore for the last couple of years. Most people, I would wager, have been shifting their money into offshore feeder ETFs, and it’s been the right choice for much of that period, let’s be honest. But in 2025, that seems to have shifted the other way. And that talks to diversification, right?

Kingsley Williams: It certainly does. And I think the old analogy of not having all your eggs in one basket is probably the simplest way to understand diversification. If you trip and fall carrying your eggs in one basket, you’re not going to have many eggs left. So I think that’s the simple analogy. And as I mentioned, we actually travelled up to Sun City recently for the recent Investment Forum conference up there. It was a stark reminder of the potholes and speed bumps that actually await investors when investing in risky markets. Those potholes and speed bumps which you encounter on the road from Lanseria up to Sun City sneak up on you when you least expect them. You’re comfortably cruising along at 120kms/hour, only to be greeted by a camouflaged speed bump with no warnings that it’s there. You really need to have your wits about you.

The Finance Ghost: I’ve lived in the Western Cape for too long now because when I hear someone talk about potholes, I’m like, yeah, that’s a cool analogy. But up there, it’s a lived experience. That’s the difference.

Kingsley Williams: It was very real. And Nico was actually driving, who you know well. Thankfully, he was super alert and was able to slow down in time. Otherwise we might have lost a wheel or our suspension.

The Finance Ghost: Yeah, please, we need Team Satrix out there. We don’t want to come and find you guys on the side of the road on your way to the bushveld.

Kingsley Williams: Exactly. So without taking the analogy too far, we know that section of the road is problematic because of the road signs, or some of the road signs. Word of mouth before we took the trip, and also the time that Google Maps indicates it’ll take us to get to our destination.

I guess in the same way, we also know that markets, by their very nature, are going to be bumpy. It’s a feature, especially of equity markets, it’s not a bug. We shouldn’t be worried when the occasional correction comes our way. That’s certainly what we’re seeing happen at the start of this year.

I’d also go further and actually caution investors to not be too concerned about this minor correction. Let’s just contextualise it. Three months is very short term in the context of what our investment horizon should be when investing, particularly in risky assets. We should have a minimum term of five years – five would be the absolute minimum – it should ideally be seven to ten years. That’s the term you want to be thinking about when investing in risky asset classes like equities.

The other thing that we should bear in mind when being exposed to markets is that past is not prologue. I was having a look at where that came from. It was actually past is prologue, which came from Shakespeare’s Tempest play, but when it comes to investing, past is not prologue. In other words, one interpretation of that is that past performance is no guarantee of future results.

Let’s just rewind a little bit. We’ve had phenomenal returns from the S&P500 over the past two years. 37.5% in rands in 2023, 26.2% in 2024. But interestingly, I was looking back, and it was down 13.5% in 2022.

Let’s contextualise that relative to the 5% down that we’re talking about now. I think that speaks a lot to human nature and our recency bias, where we forget more severe pain in the past because it’s a distant memory, and the more immediate pain which might not be as severe as what we experienced previously, occupies top of mind. It’s important to keep context in these things.

In the short-term, as I’ve mentioned, markets are inherently volatile, which is why time or the term you are invested for is such a critical consideration. You want to make sure that when you’re investing in risky asset classes like equities, when you’re taking additional risk by investing offshore, where the currency now plays a big role as well, that you give that sufficient time to play out. Three months is very much a blink of an eye and operating in the short-term space.

Prof Eugene Fama, who’s a Nobel Laureate in economics and finance, put it this way, and he said that if you’re worried about short-term corrections in risky assets, then you probably shouldn’t be invested in risky assets in the first place. Again, to what Nico said earlier, volatility and risk and corrections are a feature of investing in equity markets. They’re not a bug, so we should expect them.

And in fact, the bigger risk is not taking enough well-rewarded risk, which can significantly compromise your long-term wealth accumulation journey. So unfortunately we are bombarded with a lot of short-term news, daily market performance, that’s what you hear on the radio, that’s what people are talking about most of the time. It means it’s difficult to actually take a step back and see the bigger picture because all we hear about is the short-term.

But to get back to your original question, what does diversification actually mean? And it’s a bit of a technical answer, so I hope it makes sense. But essentially, when you’re diversifying, you want to achieve two things.

The one is to remove what we call idiosyncratic, which is a very fancy word for stock-specific risk. Essentially you want to take that off the table so that you’re only left with the asset class or systematic risk associated with the asset class you’re invested in, which is a far more manageable and predictable risk that you prepare to face. You can start quantifying that more accurately. And the reason I say that is because it’s impossible to predict whether a company, an individual company, is going to have some scandal or unique event that significantly impacts its value. That’s very unlikely to happen to all companies at the same time or the market overall. So that’s the one way that you want to diversify, is to be exposed to as few idiosyncratic risks as possible.

And then the other way to diversify is across those asset classes or geographies with the objective of finding – ideally, this is the holy grail – asset classes that are negatively correlated, or, simply put, they pay off at different times. In other words, when equities are down, bonds or gold are up. And so that helps to sort of smooth the ride, which serves a very important purpose of keeping investors invested. Because the worst thing you want to do is looking to be changing your strategy when markets are down, you’re selling at exactly the wrong time.

The Finance Ghost: Look at you quoting Shakespeare on a Finance Ghost podcast! I love it. And you’ve quoted Tempest there, which is, of course, a violent storm – that’s what a tempest is, it’s an old word and you don’t hear it very often. And sometimes people feel like they’re in this kind of violent storm when they’re down 8%. But that’s not a violent storm. That’s just a little correction along the way. It’s a bit of volatility.

If you go back and you have a look at the genuine market crashes, inevitably it’s about 30% to 35%. That’s kind of the drawdown that you see from peak to trough. Sometimes it’s very quick, sometimes it takes a bit longer, but that’s really what ends up happening. So, down 5%, down 8%, down 10% is not the end of the world by any means, but the points you raise about diversification are absolutely right.

And you raised something really interesting along the way in that answer as well, which is the risk of not taking risk. We are in an inflationary world, literally we are. And it seems that it’s going to stay that way, because nothing I’m seeing at the moment from the US government tells me that inflation is coming down. It’s pretty annoying because it means rates might stay higher for longer on that side and the local reserve bank seems to show very little desire to decrease rates here unless we see them coming down elsewhere.

So that is frustrating. It feels like higher interest rates are here to stay. It feels like inflation is here to stay. And so, money under your mattress – and I think people listening to this are not doing the money under their mattress thing, it’s not that kind of audience – but I do think that a lot of listeners may still be a bit cautious. They’re kind of sitting in a savings account earning a very low number. And we’re not talking about emergency savings here. I mean, we can talk about that later. Actual investment money, in excess of any kind of reasonable short-term savings amount, if you’re just sitting there making 5% or 6% pre-tax, you’re not moving forwards. In fact, you’re not even moving sideways at those numbers.

You need to be adding risk to your portfolio with a long enough timeframe that you’re getting paid for that risk, right?

Kingsley Williams: Yep, 100%. In fact, I heard a great analogy, which I’m sure as kids we’ve all tried to do and that’s walk up an escalator in the opposite direction. You know, an escalator that’s coming down. I certainly tried it as a kid much to my mom’s…

The Finance Ghost: …kids now are on iPads, Kingsley. They’re not doing stupid things like running up escalators the wrong way. I feel like we had a better time, but it is what it is!

Kingsley Williams: But that’s a little bit like what inflation’s like, right? That’s the hurdle or the headwind that you’re facing. You’ve got to be going much faster than that escalator coming down in order to make a return. You’ve got to be making significantly more than that.

You mentioned tax as well. On a pre-tax basis, you’re going to get taxed on that return. If it’s 5% or 6%, if it’s income, you’re going to be left with up to half of that or close to half of that as a real return, which is way less than what inflation is. So, yeah, definitely you want to be taking risk if you on a wealth accumulating journey, and you should be on a wealth accumulating journey to provide for yourself later on in life.

The Finance Ghost: Yeah, absolutely. The other thing that always comes up is people talk about the difference between diversification and “diworsification” – now, that analogy of all your eggs in one basket I think is great because it actually talks to the reason for diversification. It’s not to say, oh, this will get you way more eggs or way more chickens or anything like that. It’s to tell you if something goes wrong, you’ll at least have some eggs. It’s a downside risk protection mechanism.

Because obviously, hindsight’s perfect, right? Diversification looks silly if the one market did 20% a year and the other one did 5% a year. Of course, you don’t want to be in both markets. You just want to be in the 20% a year. That was the right call, but hindsight is perfect. Diversification is to say that you can’t be sure of exactly how this is all going to play out. You can make a lot of really educated guesses and there are a lot of professionals who do that day in and day out. Some of them get it right and some of them get it wrong, so it’s clearly not that easy.

How do you think about or explain the diversification versus diworsification issue? Can you make a portfolio worse by diversifying?

Kingsley Williams: Yeah, you can. So let me just unpack how that can happen. You can hold asset classes that provide protection in the short term, so they might save you when you have a little bit of a correction like we’ve had at the start of this year and have added value there. But ultimately over the long term, and this is where term becomes such an important variable to keep in mind when investing, that diversification could ultimately create a drag on your portfolio, a structural drag on your performance over the long term.

So you might have a good idea of what the longer term expected returns might be for a particular asset class, and yes, it’s there to protect in the short term and hopefully it helps you remain invested, but if you know that that is ultimately going to deliver a return lower by a certain margin than, than what you’d ultimately like to be invested in, you are going to experience that lower return in your portfolio.

So it all becomes a question of: what are you trying to solve for? How long are you invested for? What is your horizon? And if you’ve got a long horizon, you want to try and take as much well rewarded risk for that horizon. As you get nearer to that end date or that target date of when you might start needing those funds and drawing on those funds, that would be the appropriate time to start realigning that portfolio to ensure that it is not all at risk now, because you don’t want that big volatility and you also don’t have the luxury of an indefinite amount of time to allow those asset classes to pay off. So that’s where you do want the protection. The other way in which diworsification, as you put it, can affect you negatively is where you’re holding asset classes which in the end don’t smooth out returns because they behave in lockstep with each other.

You say, well, why on earth would you do that? Well, it’s because again, past is not prologue. You can have a look at how things should behave historically and how they have behaved historically, but that’s no guarantee that they will continue to behave in a negatively correlated way. Correlations are not static things. They evolve and they change.

So historical correlations, while there may be a more reliable predictor of what’s likely to take place than returns in and of themselves – it’s probably a bit easier to predict volatility and how things interrelate with each other than it is to predict an actual return for a particular stock or asset class down to a number – there’s no guarantee that those historical correlations will continue to play out going forward.

I mean a good example of that is global bonds. How historically, certainly pre-global financial crisis, there was that well-established negative correlation, relationship with equities. But given quantitative easing and everything that happened post-GFC, those correlations between global bonds and global equities have been rising to the point where you look at that and say, well, why would I want to hold global bonds if they’re behaving so similarly to equities? It doesn’t appear as if they’re going to provide any protection. All they’re going to do is create a lower expected return for my portfolio overall.

You want to think about that quite carefully. So yeah, it gets quite complicated quite quickly. But I’ll do a shameless punt here. If you’re feeling quite overwhelmed by doing all of that work, don’t worry, Satrix has done it for you. We have a range of well-thought-out balanced funds, both local and global, and global only, which we recently launched last year. If you’re feeling overwhelmed by doing all of that work and combining those different asset classes together, that is something we spend a lot of time thinking about. That’s what keeps me up at night. We spend a lot of time working, working on how we can optimally structure portfolios to invest across different asset classes to be optimally diversified.

The Finance Ghost: What really keeps you up at night is wondering if that new loft of yours is going to make it until the next morning. But it is interesting and we should talk about that more actually. But before we get into maybe a little bit more about that balanced fund, I think the concept of correlation is something we should just spend more time on because I’m not sure that people always understand what it means.

So correlation, positive correlation doesn’t mean this asset goes up 10% and so the other asset goes up 10%. What it means is that a lot of the time they move in the same direction, but that doesn’t mean they move to the same extent, right? So for example, when you’re going and buying an index of small caps, and this is why I don’t do that, because the market just doesn’t really like small caps. You’ve got to be a great small cap to break through. What ends up happening is in the good times, your small cap portfolio looks okay until you go and depress yourself by looking at what the big index did because it probably did better. And in the bad times, you get murdered on your small caps because it’s risk-off.

It’s not giving you any diversification against buying the broad market index, it’s just giving you a worse version of that. If you want to go play in small caps, the only way you’ve really been rewarded in recent years is to go and do some really great stock-picking. But as a broad index, it hasn’t worked. So that’s an example of where those two things are correlated, highly correlated, but they’re not moving by the same percentage each time.

Is that a correct view on correlation?

Kingsley Williams: Yeah, exactly. And there are two measures which speak to similar aspects. Correlation is a standardised measure, which tells you whether things are moving in the same direction or in opposite directions, but it takes out the magnitude aspect of that. And then you’ve got covariance, which factors in the magnitude of those movements, but it’s not a standardised measure. So yeah, I think you summarised it very well.

This is where it starts getting quite complicated when building a multi-asset portfolio is that you’ve got to look at how stable those correlations are through time because you’re banking on that providing that diversification benefit. But if those correlations are not very stable, or there’s not a fundamental underpin as to why these things should behave differently in different market cycles, what you hope pays off might not pay off. Then you actually may have been better off having a much simpler portfolio in a particular asset class without all the effort of trying to get clever in blending them together. But we spend a lot of time looking at that, amongst other things in trying to construct optimal multi-asset portfolios.

The Finance Ghost: The one asset class that people frequently reference has been a genuinely good source of inflation protection long-term and has relatively low correlation versus some of the other asset classes etc. is of course gold. Gold has been having a very good time of late. There’s a good example of how people will add something to a portfolio that is designed to be that strength and underpin over time and a bit of inflation protection.

It’s just an example because as you’ve pointed out, stuff like fixed income (bonds) and equities are not necessarily – the old 60/40 story is not really where the world is anymore. You’ve mentioned those balanced funds and I’m actually quite keen to learn a little bit more about that while I’ve got you. So actually, let’s do that. Let’s talk about how you think about those balanced funds. Are we anywhere near the old 60/40 rule of thumb or how do you actually go about doing this?

Kingsley Williams: Yeah, so we don’t anchor ourselves to that. The process we follow in constructing those multi-asset portfolios or balance funds – and like I said, we’ve got a range, we’ve got our flagship one which is the Satrix Balanced Index Fund. It’s a unit trust that is a high equity multi-asset fund. That’s the category it plays in. It’s meant to be predominantly exposed to equities, but it can’t be 100% equities. It also aims to comply with Regulation 28, which is our local Pension Fund Act regulation which stipulates what your upper limits are in terms of exposure to certain asset classes. It goes down even to stock level in terms of how much you can have in exposure to any one counter. There are a lot of regulatory limits that we need to comply with in constructing those portfolios within those constraints.

What you want to do is get the best risk-adjusted return, so that’s what you’re trying to maximise. What that means is you take your return and you divide it by your volatility and you want to try and get the optimal ratio. That’s often called a Sharpe ratio. We do a simplified version where you exclude inflation from that.

That’s the process we follow and we actually take the view – and this is backed by lots of industry research – that 90%+ of your returns and the volatility that you’re going to experience in your portfolio is going to be determined by your strategic asset allocation. In other words, how much equities versus bonds versus cash versus various other asset classes that you may be exposed to, local versus foreign. That’s going to explain 90%+ of your long-term returns and so we take the view that we want to focus on getting the best strategic asset allocation that we can possibly achieve with all the information that we have at our disposal. We do a deep dive exercise in doing expected returns at a fundamental level per asset class every second year.

And then we stick to that asset allocation. We don’t get swayed by short-term moves in the market and say, ooh, should we be selling out of this now? Because looks like it’s hit a bit of a headwind? We let the long-term cycle play out. And I think that speaks a lot to this notion that you often hear, which is it’s about time in the market, not trying to time the market or timing the market.

We actually adopt that philosophy in the way we manage our multi-asset funds. Their track records speak for themselves. They’re doing incredibly well relative to peers in the industry which do try and time the markets and charge you a much higher fee for that. I guess the results speak for themselves that the value-add from doing that versus the fee you pay doesn’t really leave the client in a better position all the time. So that’s the approach we follow.

And then we’ve got a low equity version as well. So that would be for more conservative investors, more cautious investors who don’t want as much of their capital exposed to risky equity markets. They might have a shorter investment horizon, say three to five years. It’s got much lower tolerance to equity exposure. I think the maximum is 40%. It’s a much more defensive play, generates a lot more income, but certainly not the kind of income levels that you’d get from your money market account or cash in the bank. It’s much higher than that because it’s exposed to bonds. But it also has growth potential because it does have equity exposure in there.

So those are our two unit trusts. And then very excitingly, last year we launched a global only balanced fund ETF. It’s the first ETF on the JSE that provides multi-asset exposure in ETF form, investing in developed equity markets, emerging equity markets, real assets in the form of listed infrastructure, listed real estate, and then a range of different income strategies. Global aggregate bonds, US inflation linked bonds or TIPS, short duration credit, very well diversified, and then enhanced cash.

All of those are combined together in an optimal mix to give you – I think it can be quite daunting when considering what you should be investing in offshore. There’s such a massive universe at your disposal. Global markets are massive relative to the South African market. And it’s hard enough to be successful just investing in our local equity market. Imagine the pitfalls that await you in trying to pick an individual stock globally. This tries to really make it an obvious first step for foreign investor wanting to diversify their investment portfolio from South Africa and have global exposure. There are a lot of good reasons that you’d want to do that, but they don’t know where to start. Do they need to build a whole portfolio of picking this Satrix fund and that Satrix fund and combining them all together? Or you can just buy this one off the shelf. It’s done all that hard work and thinking for you. Have that as a base, have that as a core in your portfolio. And once you get a little bit more comfortable, you can say, okay, I’m bullish on this asset class or this particular strategy. I want a bit of Nasdaq in there, or I want a bit more infrastructure or a bit more bonds, then you can start complementing that portfolio with your own views.

So, yeah, that’s the range that we now have available.

The Finance Ghost: Yeah, it’s great. And I love the reference there to a core part of your portfolio. It’s like baking a cake – you’ve got to have a decent amount of the actual cake before you can put the icing on top and some sprinkles and everything else. People think it’s this all or nothing, I’m either an ETF person or I’m a single stock person, but it’s not true. I have both for very good reason because the ETFs build up your market exposure and they do it in a very cost-effective way. No one is stopping you from then saying, okay, I’m going to take a percentage of my portfolio based on my risk tolerance and I’m going to then treat that as my money that I manage myself in the market with my own stock picking, treat it almost – I don’t want to call it a hobby really, but it can be – and for a lot of people it is one. It’s a hobby that pays if you get it right, which is quite nice because most hobbies just cost you a lot of money.

You can then do some stock picking with a percentage of your portfolio and track how you’re doing if you really get into it and see how it all goes. But at least you’ve got the bulk of it sitting in this low cost ETF structure that is giving you the strategic asset allocation because, absolutely, I love a bit of stock picking here and there obviously, but I’m definitely not sitting there going, oh, I have a better way of thinking about my overall strategic asset allocation, because you actually need to take emotion completely out of that. Emotion is something you should try and get out of your market activity as often as you can. But in stock picking you can actually use emotions to your benefit. You can see when there’s emotions in a stock and you can learn to see those patterns and actually do something with them. But strategic asset allocation, I feel like that’s got to be a science. Less art, more science. Would that be a fair statement?

Kingsley Williams: Yeah, 100%. We follow a very rigorous and thorough process building up what the expected returns are for each asset class, understanding their risk profiles, the volatility and the correlations between those asset classes, and then combining all that information into an optimiser which tries to get you the best risk-adjusted return. Like I mentioned, that’s the primary objective. But even those optimisers can become very complex very quickly in terms of how you solve for that optimal outcome, how you look at correlations and the relationships between correlations at different levels.

So yeah, I think it’s a pretty robust process. It’s certainly borne out in the results that those funds have achieved. And one other shameless little punt I’m going to put in here, Ghost, is that Satrix Global Balanced ETF, you can access it under ticker JSE:STXGLB, is the most cost-effective, multi-asset global fund that you can get in the South African market. You wouldn’t be able to build that portfolio yourself utilising existing products available on the market. We’ve had to shop around and sharpen pencils in various areas, find other ways to make that more efficient. So you can access that fund for 35 basis points as a total expense ratio across all these different asset classes, which is very cost effective. There isn’t another fund on the market that comes in at that price point.

The Finance Ghost: I’m going to irritate you to within an inch of your life now by quoting the performance since December, which is now four months long, so forgive me. But I will say this: it’s flat. It’s pretty flat. That’s interesting because on a balanced fund that’s what you’d hope to see if equities have had quite a tough time. Global equities have had a tough time and by the way, that JSE Top 40 performance – I actually did something recently on that – if you go and have a look at the underlying drivers of that performance, it’s not, oh, the whole JSE is up. I mean it’s never that, but it’s all about the weightings within the index, right? And oh, gold is doing well. And actually platinum shares have had quite a good start this year. Surprisingly, the big telecoms players have shot the lights out, out of nowhere – it’s actually a bunch of weird sources of strong returns that have been driving the Top 40. If you were invested in the SA consumer story, you’ve had a horrible start to the year.

This is the beauty of the markets. You’ve got to understand the thing you’re looking at. And I think that on something like this, it’s just a really logical way for someone to build up that core exposure. You would be able to buy this in your tax-free savings account, I would imagine, because it’s an exchange traded fund. In the classic “buy and forget”, I don’t think you can find much more buy and forget than taking your TFSA allocation and thinking about funds like these. Obviously it’s specific to each person. In no way is that advice. It’s more just saying this is the way you can think about your building blocks within your portfolio as you look to piece it all together. And then if you want to be buying the dips in the single stock exposure, you can still do that. You can go and have fun with all those things. I certainly do and I really enjoy it.

So, Kingsley, it really has been a great chat. We’ve learned so much about these balanced funds. They are available on the market, they’re available through Satrix, they would be available on the SatrixNOW platform that we’ve talked about many times before on the show with the various guests from Satrix. Thank you for taking your time to do that. It’s been a pretty rough quarter for a lot of people and I think this is a timely reminder that your time horizon needs to be much longer than, oh, one quarter. There are tools available on the market for you to – I don’t want to say smooth out your returns – but in some respects it is that and to actually add building blocks into your portfolio that are a little bit more stable.

It’s like any good family at Christmas, there’s always that one crazy uncle and that’s fine. But if your whole portfolio is crazy uncles, then Christmas can get a little bit wild. I’ll finish off with that Kingsley, thank you for your time and I look forward to having you back. Be careful on the roads to Sun City, please. It’s a non-glamorous end to the Satrix investment team story for you and Nico especially.

Kingsley Williams: Yeah, let’s not get into a conversation about key man risk.

The Finance Ghost: I was going to say and then I stopped short and I was like I’m not sure you guys should be in the same car out to Sun City, but anyway.

Kingsley Williams: A pleasure talking to you Ghost. And thanks. The conversation is always super interesting and engaging. So thank you for having me on. Look forward to the next time.

The Finance Ghost: Thank you!

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