FAR AND WIDE
Global investing is no silver bullet
South Africans concerned about the local economy may think investing offshore is the solution. But it should form part of bigger-picture portfolio planning, writes Johann Barnard
SA investors’ appetite for diversifying their portfolios beyond our borders is continuing apace. With the economy all but stalled, ratings agencies still pessimistic about an improvement and political uncertainty fuelling fears, it’s not surprising that offshore options are looking attractive. One measure of this interest is the R5.5bn net inflows into locally registered foreign collective investment portfolios there have been in the first quarter of this year. According to the Association for Savings and Investment SA this pushed assets under management in these funds by end-March to R383bn, from R363bn at the end of December last year. These figures exclude rand-denominated collective investment schemes offering access to or tracking international markets. The interest in global assets as a way to de-risk exposure to the local economy makes sense on many levels, but is no guarantee of a risk-free investment strategy.
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