Lubabalo Khenyane

Last quarter, we highlighted our expectation of higher volatility as the world makes sense of President Trump’s policies as well as the impact of fewer rate cuts from the US Federal Reserve. These have put a dampener on the multi-year rally in US companies. In fact, cheaper markets in Europe and China are performing better this year. 

South African equities are also doing well. Our preference for domestic assets compared with offshore is paying off. We continue to hold this view as we think, despite the recent rally, domestic equities and bonds remain attractively valued. Sentiment towards them is also positive given the resurgence of China’s technology companies, higher commodity prices and better country governance due to the GNU. 

These have trumped the fallout with the US, and we expect them to continue providing tailwinds to domestic assets. We are using SA and global cash to fund our overweight position in growth assets.