Welcome to the Q3 review of Orion Investment Managers, during which the company experienced considerable and encouraging growth. It’s been an eventful quarter, with markets responding to shifting interest rate expectations, moderating inflation, and mixed global growth signals. Through it all, our focus remains clear — staying disciplined in how we allocate capital, managing risk with conviction, and seeking out the best long-term opportunities to deliver strong, consistent real returns for our clients.
The local asset and investment management companies owned by Orion are:
Cadiz Asset Management, which is a specialist local fixed-income manager.
Starfunds.ai, which is a unique, rule-based quantitative manager.
Accorn Investment Management is a long-only, equity and multi-asset manager.
We have added a new D2 fee class (no performance fees) to both the equity and balanced funds and the new fee classes are replacing the D class in the wrap funds.
Palmyra Asset Management is focussed on local equity, property, and multi-asset funds.
Capita Asset Management manages long-only, equity and multi-asset funds.
Investin Asset Management, who manage long-only, equity and multi-asset funds.
On behalf of the Orion Investment Managers Team, I would like to thank Warwick for the business invested in our funds and portfolios during the third quarter of 2025 and we look forward to your continued support during Q4 2025.
Strategic Asset Allocation
Cash
We maintain a negative view on cash, as it is unlikely to achieve our target return thresholds of CPI+3% in low-equity stable funds and CPI+4% in balanced mandates. Our base case remains that the South African Reserve Bank (SARB) will continue its gradual monetary easing cycle over the next 12 months, with three 25 bps rate cuts anticipated before the end of 2026.
Cash continues to serve primarily as a liquidity buffer and as a tactical funding source for higher-conviction opportunities within our portfolios.
Bonds
We retain a constructive stance on nominal bonds and have extended portfolio duration relative to the All-Bond Index. Although yields have compressed to approximately 8.80% on the generic 10-year benchmark, valuations remain attractive in both historical and relative terms.
We remain negative on inflation-linked bonds, maintaining zero exposure across our multi-asset portfolios, as current real yields and inflation break evens do not offer sufficient compensation for duration risk.
Property
Following the strong rally in the listed property index, we have taken profits and reduced exposure. Our current weights stand at 2% within stable mandates and 4% within balanced mandates.
While property fundamentals remain supportive—underpinned by the prospect of further SARB rate cuts—the sector’s near-term valuation appeal has moderated.
Equity
We remain neutral on domestic equities, where valuations continue to offer a balanced risk-reward profile relative to other local asset classes. Equity weights have been maintained across our portfolios.
From a sector perspective, we hold an overweight position in industrials, have reduced exposure to resources, and remain underweight financials relative to their weights in the FTSE/JSE Capped SWIX All Share Index.
Global Asset Classes
Cash
We remain underweight global cash, as the return outlook remains subdued in anticipation of further policy easing across developed markets. While the pace of monetary accommodation may be slower than previously expected, we continue to prefer global equities over both cash and fixed income.
Bonds
We hold a neutral stance on global bonds following the Federal Reserve’s 25 bps rate cut in October, with the market currently pricing in one additional cut in December.
In response, we reduced exposure to shorter-dated TIPS and high-yield corporate bonds in the 0–5-year segment, reallocating towards international treasuries. We maintain a short-duration bias relative to the Bloomberg Global Aggregate Index, reflecting our view that yield risk remains asymmetrically skewed to the upside.
Equity
We retain a positive outlook on global equities, maintaining our current exposures across balanced and low-equity stable mandates.
We continue to prefer developed markets over emerging markets and maintain a structural overweight to the United States relative to its weight in the MSCI World Index. This reflects our conviction in the superior earnings resilience, balance sheet strength, and innovation leadership of US corporates, particularly within the technology and healthcare sectors.
In summary, we maintain conviction in nominal bonds and developed market equities while remaining cautious on cash and inflation-linked bonds. Locally, attractive yields support our positive stance on nominal bonds, with neutral equity positioning and selective sector exposure. Property weights have been trimmed post-rally. Internationally, we favour developed markets—particularly the US—over emerging markets and bonds. Portfolios remain positioned for moderate growth, emphasising diversification, valuation discipline, and real return potential.
Asset allocation remains the primary driver of portfolio performance and risk-adjusted returns. Our strategic asset allocation (SAA) framework is reviewed quarterly, incorporating both top-down macroeconomic analysis and bottom-up valuation metrics.
Adjustments to model portfolios and multi-asset funds are implemented following each review, ensuring alignment with our consolidated house view and long-term investment objectives.
We remain disciplined in the application of our investment philosophy—anchored in valuation awareness, risk diversification, and consistent execution—and will continue to manage client portfolios in accordance with these principles.
In the meantime, I wish everyone in the Group a successful Q4 of 2025 and look forward to speaking to you in the coming weeks.
