Quote of The Month – Invest Offshore for The Right Reasons

Radhesen Naidoo and Thandi Skade from Allan Gray-Orbis:

“The South African rand is often referred to as one of the most volatile currencies in the world, and its unpredictable nature will typically come up in conversations about investments. Diversifying your investment portfolio with offshore exposure can be an effective way to mitigate rand weakness and foreign currency fluctuations, which heavily influence the price of food, petrol and other goods and services.

More importantly, it helps investors tolerate periods when markets can be turbulent as you spread your investment risk across different currencies, regions, and economies. This means you can maximise the potential to earn long-term returns under different market conditions, while still protecting your capital in real terms.

If you consider that, by market capitalisation, the FTSE/JSE All Share Index represents around 1% of the total global listed equity market, investors holding a heavy weighting in local stocks, or those with little to no offshore exposure, risk missing out on the opportunities that are either underrepresented or unavailable in South Africa.”