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Post-COVID-19: Where will the money come from?
As the COVID-19 pandemic has battered economies, the world is now looking at where the money and growth will be coming from. In its latest report, Anchor Capital looked at the key investment themes that are likely to play out of the next 18 months, providing insights on opportunities and risks. Joining CNBC Africa to unpack the report is Peter Armitage, CEO of Anchor Capital.
Wed, 14 Oct 2020 16:45:58 GMT
Disclaimer: The following content is generated automatically by a GPT AI and may not be accurate. To verify the details, please watch the video
AI Generated Summary
- Diversification and the importance of being a global citizen in portfolio management
- Identification of opportunities in South African equities and undervalued offshore shares
- Cautious approach to investing in the tech sector amidst stretched valuations and the impact of the US election on market volatility
The COVID-19 pandemic has brought about significant challenges to global economies, leaving investors searching for opportunities in a volatile market. In a recent interview with CNBC Africa, Peter Armitage, CEO of Anchor Capital, shared insights from their latest report on key investment themes for the next 18 months. The main headline of the report, 'Being a Global Citizen,' highlights the importance of adopting a global perspective in portfolio management. Armitage emphasized the shift away from traditional strategies of focusing solely on South African equities, urging investors to consider the technology sector for growth opportunities.
Armitage pointed out that Africa constitutes less than 1% of the global market, underscoring the need for a diversified approach to investing. With expectations of 11 to 12% returns in the South African market, Anchor Capital suggests that investors may benefit from increasing their exposure to local equities. While offshore markets offer opportunities, Armitage advised against relying solely on index funds, highlighting undervalued shares such as JP Morgan and tech companies poised for future growth.
The tech sector, which has emerged as a winner during the pandemic, faces stretched valuations, prompting Anchor Capital to recommend a cautious approach. While some profits have been taken in the global tech fund, the focus remains on identifying the next big winners in the industry. Armitage emphasized the importance of sticking with investment themes over time and actively seeking opportunities to supplement portfolios.
Looking ahead, the impending US election poses a short-term risk to markets, with uncertainty surrounding the outcome leading to increased cost of protection. Anchor Capital outlined four likely scenarios post-election and their potential impacts on investment strategies. While a Democrat win is anticipated to result in higher taxes and government expenditure, Armitage believes the net effect will be positive. Concerns over potential volatility post-election prompt a strategic approach to navigating market fluctuations and seizing buying opportunities amid any short-term market disruptions.
In conclusion, Armitage stressed the significance of maintaining a global investment perspective, diversifying portfolios, and staying vigilant in the face of market uncertainties. With a focus on long-term growth potential, investors are advised to carefully assess risks and opportunities in the post-COVID-19 investment landscape.
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