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July 21, 2022

Why politics is poison in a portfolio

17 July 2022 Twenty months ago, the South African Reserve Bank (Sarb) published commentary unintentionally implying that institutional investors – the custodians of retirement funds – were suddenly allowed to place all their assets offshore, from a prior limit of 30%. Very swiftly, a chorus of negative comments appeared in various media claiming that South Africa was a failed state, and recommending that investors take all their assets offshore. This type of story resonates with many South Africans disenchanted with local politics. The negative publicity also adversely affects the local economy and the reputation of the country within the global investment community. The narrative spun by these ‘influencers’ at the time, was that the freedom to invest offshore in a much greater universe of potential options and instruments would set free South African long-term investors whose nest eggs could be...
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