Daily Investor’s 2023 South African Investor Report revealed that international shares are growing in popularity among local investors.
This year’s report was based on responses from 1,443 retail and institutional investors. The survey was conducted in July 2023, and most respondents were high-income earners who actively invested.
51% of survey respondents said they think international shares provide the best returns, a significant increase from 40% a year ago.
The jump in popularity of international shares is linked to increased uncertainty in the local economy and the rand’s volatility.
The significant decrease in the rand’s value in May 2023 scared many investors and made them look for offshore assets to protect their wealth.
Property, South African shares, and money markets were far behind international shares as preferred asset classes for growth.
Safeguarding against losses
A surprise was that international shares were also the preferred asset class to protect investors’ money against losses.
This is a significant change from last year, when most retail investors saw property as the preferred way to protect their investments.
Equities are typically seen as high-risk assets aimed at growth rather than protecting against losing money.
However, in the July survey, many South African investors saw international shares as the best way to protect against losses.
The driving force behind this change was rand weakness and political instability, which created concerns about local assets.
It should be noted that institutional investors preferred money market investments over property to protect clients’ money.