Why equity investors are retreating from SA
Equity investors are afraid of weak economic growth and its effects
Equity investors are flocking offshore in the wake of the recent foreign-currency debt downgrades, afraid of weak economic growth and its effect on the value of their investment portfolios. This has tested some asset managers’ offshore allocation limits. "The allocation to offshore assets in unit trust funds where we have discretion, [such as] our regulation 28 funds, have largely been at or close to their maximum offshore allowance, so there has been no real change here, as we couldn’t increase direct offshore exposure any further," said Paul Hutchinson, a sales manager at Investec Asset Management. Regulation 28 is a section of the Pension Funds Act limiting how much asset managers can invest in each asset class for retirement funds. The Reserve Bank’s limit for investment in offshore assets is 25%. "In terms of the Investec Equity Fund, however, over the past month we have increased our offshore allocation. The fund can invest up to 25% of its assets offshore, but we were comfort...
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Subscribe now to unlock this article.
Support BusinessLIVE’s award-winning journalism for R129 per month (digital access only).
There’s never been a more important time to support independent journalism in SA. Our subscription packages now offer an ad-free experience for readers.
Cancel anytime.
Questions? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now.