The safety of diversification
There is wisdom in moving some assets to mature markets, writes William Meyer
International markets have been attracting SA investors for decades. Many citizens of this country want to invest overseas. Many of them already have, and thousands add to their offshore investments every year.
The rewards are obvious. The returns are much higher, you harvest the diversification benefits from low correlations with emerging markets, foreign currencies are more stable and stronger (for example the Swiss franc and the New Zealand dollar) and you obtain a level of political insurance...