The pros of offshore equity
Investors have become accustomed to above-average returns, writes Pedro van Gaalen
It was a particularly hard year for equity investors in 2018. The global economic slowdown, trade wars, the Brexit fallout and monetary policy fuelled a market rout that left few sectors and markets unaffected. "Measured in local currencies, global equity markets experienced an average decline of 7.2% in 2018, with few countries reporting gains," says Samantha Steyn, chief investment officer at Cannon Asset Managers. Radhesen Naidoo, business analyst at Allan Gray, offers additional perspective, saying that the MSCI world index was down about 9%, with the S&P 500 at -4% and the MSCI EM index at -15%. "It has been a while since investors saw negative returns in a calendar year, but it’s worth remembering that global markets have experienced a bull market since 2009. Over the past decade, investors have also become accustomed to achieving above-average returns in a low-volatility environment." While certain threats and market risks persist, it would be a mistake to avoid global equiti...