FAQs – your investments and Covid-19

By Nedgroup Investments

We fully acknowledge that this is an extremely worrying time for investors and that remaining calm is easier said than done. With so much real-time information coming in, it’s easy to get caught up in short-term sentiment and subsequently view daily developments as permanent outcomes.

We have prepared these frequently asked questions to help you navigate our current environment.

Importantly, if you have a financial planner, they should be your first port of call if you need advice on what to do with your investments. We are not authorised to give financial advice in any way.


Will it be business as usual?

Can I currently get a hold of anyone at Nedgroup Investments? 

• Yes. Our operating hours are still from 08:00 to 17:00 (CAT) Mondays to Thursdays & 08:00 to 16:30 (CAT) on Fridays.
• We are currently implementing remote working arrangements for our client services team, so responding to your queries may a take a little longer than usual. 
• You can also still transact and manage your account online 24 hours a day via the secure portal of our website or EVA, our electronic virtual assistant.
• If you do not have access to your investment account online, we encourage you to register for online access in order to manage your investments.   


How will Covid-19 affect my investments?

The market value of my investment has decreased significantly, is my money safe or will I lose it all?

• It is human nature to feel this way after losing money on an investment. History shows that investment markets have always recovered, and we have no reason to believe otherwise in the current crisis.
• Unit trusts are generally medium- to long-term investments. The value of units may go down as well as up. Fluctuations or movements in exchange rates will also cause the value of underlying international investments to go up and down.
• The key is to stick to your investment plan.


Should I switch or withdraw my investment?

• Staying invested is a conscious action, as opposed to just doing nothing.
• If you have chosen the correct investment for your long-term needs, switching funds or withdrawing from your investment now due to short term losses can adversely impact the likelihood of achieving your long-term goals.


Can I still withdraw my money?

• Yes, by using one of our online platforms. If you don’t have access to your investment account online, we encourage you to register for one. 


What should I expect going forward in terms of volatility and returns on my investment?

• This is a scenario we have not experienced before and it may be a while before we can declare that the virus is contained on a global scale. Investors should expect the current elevated levels of volatility in financial markets to continue until there is more clarity on the impact of the virus, including the actions taken by governments and businesses, on the global economy. It is incredibly difficult to identify an expected return for any investment in the current environment and investors should continue to focus on the long term average returns of each asset class.


When will things get back to normal?  

• It is difficult to attach exact timings to the various recovery milestones at this stage as no one knows how long the global market environment will take to normalise. Market corrections have occurred before, and in previous periods the length of time taken for the market to recover has varied significantly. If the pandemic is brought under control, this should lead to a faster recovery.


What are the fund managers doing to manage the funds in this difficult time?

• The Nedgroup Investments Best of Breed™ fund managers are ensuring that client portfolios receive their full attention and diligence during this period, so clients can rest assured that their investments are in good hands. The downturn does provide an attractive entry point to produce good future returns.
• The fund managers have adequate Business Continuity Plans in place which have been implemented to ensure that they are fully operational, and that stewardship of all investor portfolios continues uninterrupted.


What are the fund managers going to do to reduce the losses caused by the decline in markets?

• Although no one knew that the Coronavirus outbreak would be the catalyst for a downturn in financial markets, we’ve been preparing for these difficult times in advance, based on research into market and company valuations.
• Our portfolios have already been positioned conservatively for some time now and this has had the effect of tempering some of the losses that investors have been exposed to, and importantly, will create a stronger foundation from which to grow asset values going forward.


Can fund managers explain the loss in detail for each of the funds to help investors understand why they are losing money so quickly?

• The Nedgroup Investments investment team, in collaboration with our Best of Breed™ fund managers are working on detailed fund-specific notes to assist clients in better understanding the current environment, these are available upon request. Please email your request to clientservices@nedgroupinvestments.co.za or check our website for updates.