Jacques De Kock

Our current investment positioning reflects a cautious yet opportunistic stance amidst ongoing global market volatility. Our portfolios remain underweight in US equities and long-duration bonds going into Q3. The equity underweight is due to valuation concerns, particularly in the technology and consumer discretionary sectors. Despite the underweight position, the US economy remains comparatively strong, justifying continued exposure.

Internationally, we have increased allocations to non-US equities over the past six to nine months, driven by more attractive valuations and a strategic shift towards emerging markets. This overweight stance is closely monitored, given rising geopolitical risks. Locally, South African resource stocks such as gold and platinum have performed well, supported by the JSE’s 65% offshore earnings exposure, offering a natural hedge. With that in mind, we remain underweight SA Inc equities, though opportunities are being evaluated as conditions evolve.

The team remains focused on actively monitoring positions in non-US and emerging market equities, particularly in light of heightened geopolitical risks that could impact valuations and capital flows. We are also looking into opportunities to increase exposure to US real estate and long-duration bonds, especially as the Federal Reserve’s policy stance evolves in response to economic data. Within the South African context, any signs of improved economic rhetoric or reform momentum could warrant a shift towards greater allocation to SA Inc equities. But our main focus in Q3 is to be vigilant with a readiness to act decisively on market surprises and geopolitical developments that may create dislocations or uncover attractive entry points.

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