Making offshore waves

Structuring direct offshore investments can be valuable in a holistic strategy.

- Elke Brink

Looking back at this year, with the S&P 500 returning 31.75%, we are all smiling about the offshore allocations in our portfolios. Yes, this has been an exceptional year due to many variables. Donald Trump's re-election as US president made Mr Market happy, the interest rate cycle turned, and, of course, the tech sector led the market in many ways.

Offshore exposure remains attractive to any South African investor. We are overexposed to one market and economy—we have our property in South Africa, our incomes (in rand), most of our operational income, and local investments are bound to be more local.

Understand, I am optimistic about SA. I believe we live in one of the most incredible countries in the world, and you will not find me moving anywhere anytime soon.

I believe we have some of the most resilient companies in the world on the JSE. The nature of any South African is resilience—and so are our businesses. Looking at Capitec, Shoprite, and PSG, I get really excited about the future of SA. (The JSE has a one-year return of 18.64%).

Yet, as in any "all-weather" portfolio, as Ray Dalio would describe it, you require optimal diversification with asset allocation and jurisdiction as you diversify with sectors, economies, and demographics worldwide.