Although uncertainty has dominated local financial markets in the weeks since the cabinet reshuffle and sovereign credit rating downgrade, Prudential’s view on potential investor returns over the medium term has been less gloomy than one might imagine. The weakness seen in South African nominal bonds, listed property and financial and retail shares has presented opportunities for investors to buy up attractive assets at discounted valuations that should produce above-average returns over the medium term. As valuation-based investors positioning our multi-asset portfolios in the "post-downgrade" environment, it is important to note that we have not changed our approach: we continue to place importance on building well-diversified portfolios of attractively valued assets with the appropriate risk. These characteristics provide some level of inherent protection against future market shocks. So how are our funds positioned to earn the best possible returns over the medium term? First, o...

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