Bruce Whitfield
Investec’s chief investment strategist Piet Viljoen makes some astounding observations with regard to world markets. Did you know, for example, that Zimbabwe’s stock market was the world’s top performing market between March last
year and March this year?
Not only that, but investors in carefully chosen South African shares would have
outperformed many First World markets in dollar terms over the past year. It
wasn’t hard to outperform the Nasdaq during that period but the JSE Securities
Exchange all share index also did better than the S&P 500, and even outperformed
the Dow Jones Industrial average, despite the rand’s average depreciation of 22%
a year over the past two years.
“I think there is a bit of mass hysteria out there that tells investors it is
right to get rands offshore. But, over time, I think that people are starting to see that especially the more speculative investments offshore have not paid off
to any extent.”
Viljoen insists he is in favour of portfolio diversification, but warns strongly
against following the crowd.
“One has to watch out for group-think,” he says, “and not just go for the latest
hot market offshore.”
Viljoen backs up his argument for having a greater exposure to the JSE by highlighting the performance of his Investec Opportunity Fund, which he says has
had no offshore exposure over the past three years. It’s outperformed all the
foreign general equity unit trusts, except one.
He’s a fan of a number of industrial and consumer stocks which are off the radar
screens of most traditional investors at the moment. While they are chasing Anglo American and Anglo Platinum, Viljoen favours Tiger Brands and Nampak.
“I still think a lot of stocks locally are generally very well priced for prospective returns, so I’m happy investing here for the moment for prospective
returns. When this market becomes expensive, as it will, that’s the time to then
look more aggressively for offshore exposure.”