Offshore investing: cancel out the noise
It’s best to keep calm and focus on the fundamentals, writes Pedro van Gaalen
Investing offshore has always been a prudent investment diversification strategy, given the relative size and concentration of the local stock market, and the weakness of the rand against major currencies and its volatility in relation to other emerging markets. But today the case for boosting offshore exposure has never been greater. Political uncertainty and instability and a sluggish economy have created a poor environment for investment growth in SA. "Dramatic rand depreciation over the past five years has eroded hard currency wealth in real terms, which, when combined with the fear and negativity around the elections and economic state, is driving demand for offshore investments," says Victoria Reuvers, director and senior portfolio manager at Morningstar Investment Management. Brian Butchart, MD of Brenthurst Wealth, attributes this poor performance to a decoupling of the local economy from the robust global growth experienced since 2009. "SA’s growth has decelerated while the...