Editor's Thoughts.

How much global exposure is enough for a South African retirement fund? It is the question at the heart of Episode 7 of The Art of Manager Fusion. And when we say global, what or where do we exactly mean? Adriaan Pask’s (PSG Asset Management) latest article is a thought prompt that “global” should not automatically mean “more of the US”.

Pask argues that emerging markets deserve a closer look. They are expected to generate almost two-thirds of global growth over the next five years, supported by younger populations, urbanisation, technology adoption and infrastructure investment. But emerging markets are no one-size-fits-all trade: valuations, governance, debt, liquidity and geopolitics differ markedly between countries and companies.

But back to the question of how much global is enough. Retirement funds cannot set the offshore allocation in isolation from the fund’s liabilities. And to do that, Trustees and their advisors need to understand who their members are, when benefits are likely to be paid, the level of pensioner exposure, members’ salary and contribution patterns, and how currency movements could affect the fund’s ability to meet its commitments. Regulation 28 may allow up to 45% offshore exposure, but “allowed” is not the same as “appropriate”.

Nor can trustees simply leave the decision to an investment product provider. Providers can supply products, research and implementation capability, but trustees remain responsible for ensuring the investment strategy is suitable, diversified and aligned with the fund’s specific liabilities and long-term objectives.

The answer is not a universal percentage. It is a disciplined process: understand the liabilities, diversify globally, select emerging-market exposure carefully, and ensure offshore assets add genuine resilience rather than merely following the latest market winners.

This is just the trailor of today’s episode. Take a moment to watch it to answer the question of how much global exposure is enough for your/your client's fund.

Upcoming Events.

Most Recent Reads.

Quick Links.