Offshore investment: Hard to see where to go now
When the chips fall, in which market should investors put their money? The US, Europe or good old SA?
Investors contemplating putting money into offshore equity are confronted with tough decisions. Not least is whether to favour US or European markets. When historical performances are considered, the choice is cut and dried: go overweight US shares. “All attempts so far to rotate out of US shares into European shares have failed,” says Philip Saunders, co-head of Investec Asset Management’s London-based multi-asset team. Rotation out of the US into Europe was a very popular theme in 2016. “A lot of investors went underweight US equity last year and overweight European equity,” says Paul Hansen, director of retail investing at Stanlib. They were in for a disappointment. European equity, reflected by the euro-denominated Euro Stoxx 50 index — which consists of the 50 biggest listed companies in 12 eurozone countries — turned in a rise of 4.7% in 2016. The comparable US Dow Jones index (30 companies) romped home with a gain of 13.4%. US equity’s outperformance of European equity now st...
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