10X S&P 500 ETF Units ZAR · JSE:CSP500
10X S&P 500 ETF Units ZAR — 10X Investments — Corporate Update (April 2025)
38 slides from 10X S&P 500 ETF Units ZAR's corporate update, April 2025
Slide 1: Investments: Multi-asset webinar Q2 2025
Investments Multi-asset webinar Q2 2025
Slide 2: Recap of 10X themes
Recap of 10X themes Long-term themes we’ve covered in previous webinars 1 A bubble in US equities leading to a lost decade US fiscal sustainability concern as large deficits drive debt accumulation at higher 2 interest rates 3 Opportunities in unloved emerging markets 4 Elevated real yields increasi
Slide 3: The DeepSeek moment
The DeepSeek moment The disruption of the disruptors Magnificent 7 is 20% below DeepSeek peak Magnificent 7 31 Dec 2024 – 11 April 2025 110 Emergence of DeepSeek was the 105 top of the market for the Mag-7 100 95 90 85 80 75 70
Slide 4: Is Nvidia the Cisco of this bubble?
Is Nvidia the Cisco of this bubble? Profit from $4bn in 2023 to nearly a quarter of a trillion by early 2030’s Exponential growth forecast far into the future Nvidia LTM earnings and analyst forecasts 250,000 200,000 150,000 100,000 50,000 0 Q1 2018 Q3 2018 Q1 2019 Q3 2019 Q1 2020 Q3 2020 Q1 2021 Q3
Slide 5: Great companies can be poor investments
Great companies can be poor investments Tech Bubble Era Magnificent 7: 31 Dec 2024 99-00 PE Peak to Trough Year Surpassed Tech Company PE Ratio Company Ratio Drawdown Bubble High Tesla 202 Nvidia 54 Cisco 230 -88% Never Amazon 46 Intel 59 -81% 2018 Microsoft 35 Microsoft 87 -65% 2014 Apple 34 Meta 2
Slide 6: Tech sell-off driving weak US performance
100 105 110 70 75 85 90 95 80 Jan-25 Jan-25 Jan-25 Jan-25 Jan-25 Source: 10X Investments, Bloomberg Jan-25 Jan-25 Jan-25 Jan-25 Jan-25 Jan-25 Jan-25 Tech leading the sell-off Jan-25 Feb-25 Feb-25 Feb-25 Feb-25 S&P 500 Feb-25 Feb-25 Feb-25 Feb-25 Feb-25 Feb-25 Feb-25 Feb-25 Index total returns in Ran
Slide 7: US Equities underperforming
US Equities underperforming US Equities were weak prior to Tariffs Investors have been rotating away from US equities Index total returns in Rand 31 Dec 2024 – 11 April 2025 110 105 104 103 100 99 95 93 90 85 Dec-24 Jan-25 Feb-25 Mar-25 FTSE/JSE All Share S&P 500 MSCI World ex-US MSCI EM Source: 10X
Slide 8: With dollar weakness
With dollar weakness DXY down more than 10% YTD as other DM currencies strengthen Dollar weakness DXY April 2023 – April 2025 112 110 108 106 104 102 100 98 96 94 Apr-23 May-23 Jun-23 Jul-23 Aug-23 Sept-23 Oct-23 Nov-23 Dec-23 Jan-24 Feb-24 Mar-24 Apr-24 May-24 Jun-24 Jul-24 Aug-24 Sept-24 Oct-24 No
Slide 9: End of US exceptionalism?
End of US exceptionalism? Break in trend of 17-year outperformance of US over R.O.W The end of US exceptionalism? MSCI World ex-US / S&P 500 Dec 1999-April 2025 2,5 2 1,5 1 0,5 0 Source: 10X Investments, Bloomberg
Slide 10: Tariff policy uncertainty
Tariff policy uncertainty Policy is a moving target Highest tariffs since 1930’s US effective tariffs 1890 -2025 ▪ Tariff policy is a constant moving target ▪ Wherever they land, these will be the highest tariff levels since the 1930’s
Slide 11: US has benefitted from higher global trade
US has benefitted from higher global trade The US is wealthy because of increased global trade Global trade as % of Global GDP vs US Net wealth as % of Net Income 1840 -2024 Source: 10X Investments, Deutsche Bank, World Bank
Slide 12: Trade deficit = Foreign investment surplus
Trade deficit = Foreign investment surplus The two sides of the same coin 8 US Capital account + Financial account balance (% of GDP) 6 Net inflows into U.S. 4 assets 2 0 • Reducing the current account deficit via tariffs removes a bid for US assets -2 2 as dollars are no longer recycled into 0 US a
Slide 13: Trade deficit flows back into US assets
Trade deficit flows back into US assets US assets supported by foreign buyers Total foreign holdings, by asset class $trn 20 18,5 18 16 14 12 10 20% of total equity market 7,2 8 6 4,6 4 30% of total 30% of total 2 Treasuries corporate credit 0 US Equities US Treasuries US Corporate Credit Total fore
Slide 14: The market is the economy
The market is the economy Record household exposure to stock market Stock and bond wealth contribution to real % of financial assets held in equities, Households personal consumption expenditure growth and NPO 1994 – 2024 (Percentage points. Last actual: Q3-2022) 50 45 43% 3% 40 2% 35 1% 30 0% 25 20
Slide 15: Elevated uncertainty hits sentiment
100 120 20 40 60 80 0 Apr-95 Nov-95 Jun-96 Jan-97 Aug-97 Source: 10X Investments, Bloomberg Mar-98 Oct-98 May-99 Dec-99 Jul-00 Feb-01 Sept-01 Apr-02 Nov-02 Jun-03 Jan-04 Aug-04 Mar-05 Oct-05 May-06 Consumer confidence has collapsed Dec-06 Jul-07 Feb-08 Sept-08 Apr-09 Nov-09 Jun-10 Jan-11 Aug-11 Cons
Slide 16: Increasing recession probabilities
Increasing recession probabilities Increasing probability that we are in a recession Atlanta Fed GDPnow GDP forecast April 2022 – April 2025 8 6 4 2 0 -2 -2,4 -4 -6 Source: 10X Investments, Bloomberg, Atlanta Fed
Slide 17: In a recession, budget deficits increase
In a recession, budget deficits increase A recession would see the budget deficit get wider Federal Surplus or Deficit as % of GDP, recessions shaded 1979 – 2025 ? Source: 10X Investments, Fred
Slide 18: 45% of US debt needs to be rolled over in the next 2 years
45% of US debt needs to be rolled over in the next 2 years US Government has to roll over $10trn in 2025 US Government maturity schedule as 31 December 2024 10 9 8 7 6 USD Trn 5 4 3 2 1 0 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 2046 20
Slide 19: Weaker USD with higher yields
Weaker USD with higher yields Dollar weakening on higher US yields Breakdown in relationship between yields and the dollar “Liberation DXY and US 10 Year Yield Jun 23 – Apr 25 Day” 112 5 110 4,8 4,6 108 4,4 106 4,2 104 4 102 3,8 100 3,6 98 3,4 96 3,2 94 3 Jun-23 Jul-23 Aug-23 Sept-23 Oct-23 Nov-23 D
Slide 20: US assets and the Dollar sell-off
US assets and the Dollar sell-off USD, US Bonds and US Equities all delivering negative returns DXY, Bloomberg US Treasury Index and S&P 500 performance post “Liberation Day” 2 April – 11 April 2025 0% -1% -1% -2% -3% -4% -4% -5% -5% -6% US Dollar Bloomberg US Treasury Index S&P 500 Source: 10X Inve
Slide 21: TINA becomes TARA
TINA becomes TARA CAPE Ratio Excess CAPE Yield Dec 2015 – April 2025 Dec 2015 – April 2025 CAPE: 98th 38,6 CAPE: 94th 40 percentile 5,0% 38 percentile 36 4,5% 34 32 32,4 30 4,0% Excess CAPE Yield: 28 3,7% 49th percentile 26 3,5% 24 22 20 3,0% US 10-Yr Real Yield 2,5% Dec 2015 – April 2025 3,0 2,0% 2
Slide 22: Lost decade ahead for US Equity
Lost decade ahead for US Equity Despite recent sell-off, US equity valuation still presents a headwind for returns CAPE Ratio 10-year real return estimates for US Equity Jan 1950 – April 2025 50 Scenario 1 2 3 4 5 45 Real EPS Growth 40 35 1.0% 1.8% 2.0% 3.0% 4.0% 32 30 35 3.2% 3.9% 4.2% 5.2% 6.2% 25
Slide 23: Global market observations
Global market observations Look through the short-term catalysts to the fundamentals 1 Did DeepSeek ‘disrupt the disruptors’ and pop the AI bubble? Tariffs will result in less dollars being recycled into the US financial system to support 2 US assets 3 Lower asset prices and policy uncertainty creat
Slide 24: Elevated SA specific risks
Elevated SA specific risks 3 new risks in 2025 that could negatively impact SA growth and elevate risk premiums 1 Risk of a global growth slowdown as a result of trade-war 2 SA has been singled out for elevated tariff’s and AGOA set to end 3 Budget impasse leading to a weakened GNU
Slide 25: Volatile Rand
Volatile Rand Rand strength post SA election, weakness post tariff announcement and GNU concerns Rand has given up all of last years post election strength USDZAR vs JP Morgan EM FX Index rebased to 100 31 Mar 2024 – 11 April 2025 115 110 105 100 95 90 2024/04/01 2024/05/01 2024/06/01 2024/07/01 202
Slide 26: SA risk premium remains compressed
SA risk premium remains compressed Driven by falling breakeven inflation, real yields still elevated Low SA risk premium SA 10 yr – US 10yr Dec 2019 – April 2025 12,0 11,0 10,0 9,0 8,0 7,0 6,0 5,0 SA 10Y - US 10Y -1SD Ave +1SD Source: 10X Investments, Bloomberg
Slide 27: Real yields at pre-election levels
Real yields at pre-election levels Real yields remain over 5%, whilst nominals are 1.3% lower than pre-election Nominal yields have fallen, real yields still elevated SA real and nominal bond yields Sept 2021 – April 2025 13 5,5 12,5 12 5 11,5 11 4,5 10,5 10 4 9,5 9 3,5 8,5 8 3 Dec-23 Mar-22 May-22
Slide 28: SA equity risk premium is compressed
0,0% 1,0% 2,0% 3,0% 4,0% 5,0% 6,0% 7,0% 8,0% Jan-03 Jun-03 Nov-03 Apr-04 Sept-04 Source: 10X Investments, Bloomberg Feb-05 Jul-05 Dec-05 May-06 Oct-06 Mar-07 Aug-07 Jan-08 Jun-08 Nov-08 Apr-09 Sept-09 Feb-10 Jul-10 Dec-10 May-11 Compressed SA Equity Risk Premium Oct-11 Mar-12 Aug-12 FTSE-JSE All Sha
Slide 29: Performance
Performance
Slide 30: Asset class performance
Asset class performance US Equities underperforming Local assets outperforming global Asset class returns in Rands – 3 months and 1 year to 11 April 2025 25% Growth assets Defensive assets 20,8% 20% 17,8% 16,3% 15% 10% 8,3% 8,6% 6,8% 5,1% 5,5% 5,8% 4,1% 4,3% 5% 3,4% 3,0% 2,6% 2,1% 0% -0,5% 0,0% -1,3
Slide 31: 15-year outperformance
15-year outperformance Consistent short-term and long-term performance Resilient short-term performance Consistent long-term outperformance R100 invested on 31 December 2024 to 11 April 2025 Portfolio returns to 11 April 2025 105 16% 104 13,7% 14% 12,1% 12,0% 103 12% 10,8% 103 10,5% 10,0% 102 10% 8,
Slide 32: Positioning
Positioning
Slide 33: Asset class return expectations
Asset class return expectations SA Bonds & US Equities represent largest disconnects SA Bonds attractive, US Equities expensive 5-10 year expected real returns in Rands as at 31 March 2025 8,0% 7,0% 6,4% 6,0% 5,2% 5,0% 5,0% 4,0% 3,8% 3,4% 3,0% 2,6% 2,7% 2,4% 2,4% 2,3% 2,0% 1,0% 0,7% 0,0% SA Cash SA
Slide 34: Defensively positioned
Defensively positioned Portfolio remains defensively positioned Benchmark Portfolio Underweight Overweight SA Equity 35% 38% SA Equity 3% SA Bonds 10% 6% SA Bonds -4% SA ILB's 5% 15% SA ILB's 10% SA Cash SA Cash 5% 6% 1% DM Equity -14% DM Equity 31% 17% EM Equity 4% EM Equity 4% 8% Global Bonds -4%
Slide 35: 10X Multi-Asset Resources
10X Multi-Asset Resources Please sign up to receive Anton Eser and Chris Eddy’s latest views
Slide 36: Thank you Q&A?
Thank you Q&A? Cape Town Office Call: +27 (0) 21 412 1010 The Terraces,14th Floor, Office 01401 Email: invest@10x.co.za 34 Bree Street, Cape Town, 8001 Visit: www.10x.co.za
Slide 37: Important Information
Important Information 10X Fund Managers (RF) (Pty) Ltd (the “Manager” or “10X FM”), Registration number 2006/006498/07, is a company incorporated in South Africa registered as a manager of collective investments schemes in securities in terms of Section 42 of the Collective Investments Schemes Contr
Slide 38: Important Information
Important Information CIS portfolios are generally medium to long-term investments. The value of participatory interests or the investment may go down as well as up. Past performance is not necessarily a guide to future performance. Actual investment performance of the portfolios and the investor wi