Global economic activity has slowed due to increased US tariffs and persistent uncertainty surrounding a US foreign-policy stance that has shifted from broadly chaotic and aggressive to persistently disruptive. Financial conditions, which tightened meaningfully in the immediate aftermath of the April US tariff announcements, have since loosened, driven by a sharp rise in asset prices and lower short-term interest rates.
In the US, erratic government policy continues to result in subdued consumer and business sentiment and reduced investment, although the decline in business investment has been less severe than expected due to robust AI-driven spending. The US labour market is softening despite sharply lower supply from immigration, as companies delay hiring amid tariff uncertainty and AI-driven change. This is depressing sentiment, exacerbating skills mismatches and leading to more cautious workforce planning. Consequently, looking through near-term moderate improvements in growth, driven by fading tariff impacts, the recovery from the government shutdown and front-loaded fiscal stimulus, underlying US economic growth appears to be softening from its previously robust pace.
China’s nominal economic growth has been weak due to ongoing deflation, consumer scarring from the pandemic and the property market correction. This is reflected in low confidence, negative wealth effects and elevated precautionary savings. More aggressive monetary and fiscal stimulus and targeted structural state interventions have not yet succeeded in improving Chinese consumer confidence. Export activity has been unexpectedly resilient, with strong growth to emerging markets offsetting the adverse effects of US tariffs. It is expected to remain robust as China’s cost competitiveness improves.
Europe’s economy, which has been stagnating in part from its export link to a weak manufacturing sector in China, will start to benefit from higher domestic fiscal stimulus – particularly in Germany. Japan’s economy is expected to continue to experience a steady, domestically driven expansion supported by ongoing labour market strengthening and gradually improving business investment.
South African activity has been supported by much higher precious-metal prices and a mild recovery in real consumption as falling inflation and interest rates ease household pressure. Although, a significant increase in online betting has diverted spending from other goods and services. A more enduring lift to economic growth is, however, structurally constrained by the acute underperformance of transport infrastructure (albeit improving), poor service delivery from weak and revenue-hungry municipalities, inadequate (albeit improved) electricity supply and low business confidence. Disappointingly, the recent moderate increase in investment from very low levels has not yet been accompanied by any notable job creation.
In recent years, there has been progress made in moving to reform the economy through Operation Vulindlela and the partnership between government and business leaders that is targeting key priority areas needing reform. Additionally, the Government of National Unity has brought about positive leadership changes in key ministries and a renewed commitment by government to accelerate initiatives that address the country’s structural problems.
The Camissa Islamic Equity Fund was up 7.8% in the fourth quarter, outperforming the average of its competitor group, up 6.9%. It has returned 11.2% per annum over the last 10 years relative to the competitor average, up 9.2%. Since its inception in 2009, it has returned 11.3% annually.
The Camissa Islamic Balanced Fund was up 5.6% in the fourth quarter, outperforming the average of the competitor group, which was up 4.7%. Over the year it was up 19.4%, outperforming peers at 18.7%. It has delivered a return of 9.4% per annum over the last 10 years, ahead of competitors, up 8.5% on average. Since its inception in 2011, the fund has delivered 8.4% annually, well ahead of inflation.
In the period, positive performances were delivered by all asset classes, particularly local equity, where strong contributors included the fund’s PGM holdings, MTN, Datatec and RFG Holdings. Global equity also contributed positively, with key performances from Albermarle, Micron, Bayer and Roche Holdings.
We remain substantially underweight in the US, relative to our benchmark within global equities, and overweight in European and Japanese equities that are currently very attractively priced. And, we have reduced our exposure to PGM miners following the huge increase in these shares, and increased exposure to MTN together with a diverse range of other mispriced stocks, including an array of deeply discounted local mid-cap stocks. We also have a high exposure to longer duration government sukuks at present, which is offering very attractive inflation adjusted returns.
By: Camissa Asset Management investment team
Disclaimer: The Camissa unit trust fund range is offered by Camissa Collective Investments (RF) Limited [Reg no 2010/009289/06], a registered management company in terms of the Collective Investment Schemes Control Act, No 45 of 2002. Camissa Collective Investments is a subsidiary of Camissa Asset Management (Pty) Ltd [a licensed FSP], the investment manager of the unit trust funds and a voting member of the Association for Savings and Investment SA (ASISA).
Fees and performance: Unit trusts are generally medium- to long-term investments. The value of units will fluctuate, and past performance should not be used as a guide for future performance. Camissa does not provide any guarantee either with respect to the capital or the return of the portfolio(s). Foreign securities may be included in the portfolio(s) and may result in potential constraints on liquidity and the repatriation of funds. In addition, macroeconomic, political, foreign exchange, tax and settlement risks may apply. However, our robust investment process takes these factors into account. Unit trusts are traded at ruling prices and can engage in scrip lending and borrowing. Exchange rate movements, where applicable, may affect the value of underlying investments. Different classes of units may apply and are subject to different fees and charges. A schedule of the maximum fees, charges and commissions is available upon request. Commission and incentives may be paid, and if so, would be included in the overall costs. Camissa has the right to close the portfolio to new investors to manage it more effectively in accordance with its mandate. Additional information is available free of charge on our website or from Client Service.
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