Lubabalo Khenyane

Most asset classes have produced very high returns in 2024, fueled by lower inflation prints and the subsequent interest rate cuts. Locally, the formation of the GNU provided a strong impetus to SA-sensitive assets. As we move deeper into 2025, we think a few things are likely to drive markets. Globally, the US president-elect takes office in January, and his policies, especially for emerging market countries like ours, are likely to cause some volatility. Expectations of further interest rate cuts in the US will also be a key driver of markets next year. In South Africa, the strength of the GNU will be put to the test as politicians navigate their way around policies like NHI and the BELA bill. Given all this uncertainty, we do not have large TAA positions in our funds. We are overweight local assets compared with global assets, driven by attractive valuations. Globally, we still prefer equities and bonds. We remain negative on SA and global cash as we think central banks will continue cutting interest rates in 2025, albeit at a slower pace.