New research by Daily Investor shows that 40% of South African investors trust international shares to provide the best returns.
This finding formed part of Daily Investor’s 2022 South African Investor Report, which is based on survey responses from 1,090 South African retail and institutional investors.
The research found that there is a clear preference for international shares among local investors looking for growth.
The bias towards international equities is partly linked to the rand’s volatility and the currency’s decline over the last six months.
Property and South African equities were the second and third most popular choices to achieve growth.
Interestingly, institutional investors have a much stronger bias towards international shares for growth than retail investors.
54% of institutional investors said it is their preferred investment for growth.
Local investors showed little faith in money markets, cryptocurrencies, bonds, and gold to provide good returns.
The significant decline in the value of Bitcoin and other cryptocurrencies has seen many investors lose trust in crypto assets for growth.
Safeguarding against losses
Property, international shares, and money markets are seen as the safest investments to protect against losses.
International shares may seem out of place, but many investors see it as a way to protect against the weakening currency and local economic challenges.
South Africa has great economic and political uncertainty, and international shares are seen as a hedge against rand-based investments.
Unsurprisingly, cryptocurrencies were seen as the worst investment to protect against losses. It was followed by South African shares and gold.
It is interesting to note that gold and bonds, which are often seen as safe havens during turbulent times, did not rank well in protecting against losses.
It is likely linked to the sharp decline in the gold price over the last six months and the volatile bond market this year.