Kirshni Totaram, head of institutional business at Coronation Fund Managers, says that asset class assumptions and expectations are difficult to predict, and correlations are unstable over time, so someone has to take advantage of the inefficiencies that occur from time to time.
Totaram, speaking at the recent Terrapin asset allocation summit in Johannesburg, says that while it is true that globally asset managers have generally not out-performed their benchmarks, after fees, this is not the case in South Africa.
“We have been spoilt locally and South Africa is unique, and mangers have produced alpha, despite the fact that the benchmarks may or may not be flawed.”
On the question of the impact of the sub prime crisis- he says that the second and third round effects of the sub prime debacle are not going to miss local investors and pensioners. Third round effects could be global stagflation and political risk, locally, when the next president is elected.