According to the Daily Investor’s 2023 South African Investor Report, international shares are becoming more popular among local investors. The report for this year is based on responses from 1,443 retail and institutional investors.
The survey was done in July 2023, and the majority of those who participated were high-income individuals who actively invested. International shares are thought to deliver the best returns by 51% of survey respondents, up from 40% a year ago.
The rise in popularity of international shares is connected to rising uncertainty in the domestic economy and the volatility of the rand. The dramatic drop in the value of the rand in May 2023 startled many investors, prompting them to seek overseas assets to secure their wealth.
As preferred asset classes for growth, property, South African shares, and money markets trailed considerably behind overseas shares.
Surprisingly, overseas stocks were also the favorite asset class for protecting investors’ money from losses.
This is a big shift from last year, when the majority of retail investors considered real estate as the best method to protect their interests. Equities are often seen as high-risk assets that seek to expand rather than safeguard against loss.
In the July study, however, many South African investors considered international shares as the greatest method to protect themselves from losses.
The primary element for this transformation was the rand’s devaluation and political insecurity raised concerns about local assets. To preserve their clients’ money, institutional investors favored money market assets over real estate.