Over the past three years most asset classes on a global basis have delivered more than acceptable real returns. The same can be said for the local markets. The exception of course has been cash.

South Africa as a major commodity producer has enjoyed the benefits of exporting materials whose prices continue to rise. Domestic interest rates have caught up with the international rates. Consumers have found a renewed confidence in living in South Africa.

Globally, volatility measures such as the VIX are at all time lows. Emerging markets are enjoying the benefit of foreign inflows and Japan has started to show signs of a recovery. All this positive sentiment is against a background of rising commodity prices and global interest rates. The United States continues to borrow money as if there will be no negative consequences. What are we to make of all this?

We know when measures such as the VIX are at lows, something usually gives (in which direction we don't always know). We also know that investors often pay a high price for a cheery consensus . So what is the intelligent investor to do? T

he solution is to invest in a fund that has a completely flexible mandate, and where the fund manager has discretion to allocate between all global and local asset classes as opportunities arise.

In the Bravata fund our sole aim is to preserve your real purchasing power and will use the full flexibility of the mandate in order to achieve this. We will not hesitate to invest in companies that appear attractive, even if this means some volatility in the short term. If the balance of probabilities is not in our favour, we will not invest. Under current conditions, one can expect that we will be at least fifty per cent invested offshore.