Offshore investing necessitates a long-term outlook


“If you’re investing offshore, exchange rate risk is always going to be there. Risk is mitigated to a certain extent if you’re taking a long-term view, so longer than five years.  A lot of investors have that view,” he told CNBC Africa.

“If you give those offshore investments time, within a diversified portfolio perspective, the contribution to your overall investment outcome, from an exchange rate movement perspective is going to be relatively small.”

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According to the investment management company, while there are currently good opportunities out there for investors, it primarily depends on the type of company you invest in.

“From an economic perspective, there is some gloomy news coming out of certain first world economies, but when looking offshore, we see good value in a specific type of company,” said Matthews.

“We’re looking for companies that offer basic necessities globally because those companies are likely to be able to perform consistently even in a subdued economic environment.”

Matthews also stated that these types of companies tend to offer investors more in terms of their dividend growth prospects, which, even in a subdued economic environment, remain decent.

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“Those types of companies have pricing power and, generally, there’s a consistent demand for the products they offer – companies like Procter and Gamble, Johnson & Johnson, Nestle, Coca-Cola. What we see there is attractive valuation,” he said.

“Quality companies 14 years ago were on very high PE multiples [and] very low dividend yields. Today those same companies are on much more attractive valuations.”