I’ve written before about the Rand’s decline against the major currencies. While currencies move up and down in the short term, it’s very clear there’s a long-term decline narrative that doesn’t look set to improve even in the medium term.
Add to this that the JSE has not performed well in 2023, increasing only 1.8% and we’re not looking at a bright picture.
A recent article illustrates the missed opportunities for Rand investors who adhere to domestic funds. A compelling point is made by comparing these funds to a low-fee index such as the Nasdaq:
"Someone who wanted to invest R500 000 in US markets would have had just more than $29 400 to invest at the exchange rate of R16.99 at the beginning of January 2023. At the end of the year, this investment would have increased by 44.8% to more than $42 000 at the end of December.
This translates to nearly R780 000 at year-end, due to the rand having declined to R18.30."
The evidence is quite clear: keeping your hard-earned money in Rands AND investing in local funds will see you missing out on currency differences and market performance.
While everyone’s situation is unique, if you are investing in Rands (whether as an expatriate or SA resident), it would benefit you to see what offshore options are available, as even the most mainstream low-fee index investing like the Nasdaq or S&P500 can propel your returns and protect your international spending power. Let’s have a no-obligation chat about your situation and see what options might be available for your hard-earned Rands.
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