An integrated approach offers advantages – no matter where you’re investing

An integrated approach offers advantages – no matter where you’re investing

For South Africans, investing has always been a global game. It’s not only because Regulation 28 of the Pension Funds Act has allowed investors to include up to 45% offshore assets in their portfolios for the last three years, or even because South Africa’s economy and stock market are small compared to the rest of the world’s. It’s also because the JSE itself is becoming increasingly global in nature, with about 54% of JSE Capped SWIX constituents earning the bulk of their income from outside SA.

We believe there is an increasingly strong case to be made for following a globally integrated approach to portfolio management, and that this is more likely to deliver good outcomes for clients in the long run. Assessing the available opportunities, both locally and globally, requires a global mindset.

In a digital world, should geographic borders still define your thinking?
Typically, local fund managers have followed one of three approaches to managing offshore assets. They have either partnered with a global manager for the offshore component, opted to use a passive exchange-traded fund (ETF) or index tracker, or opted to build offshore products in-house. We believe there is an excellent case to be made for following the in-house approach.

Firstly, given the increasingly global nature of South Africa’s local stock market, even local investment teams must be able to assess stocks regardless of borders.

Secondly, following a globally integrated approach provides positive spin-offs in two distinct ways. It helps us to avoid investing in local companies simply because they are index constituents, when global peers are better positioned to deliver for our investors (for example, favouring global energy producer Shell over JSE-listed Sasol). It also enables us to include some stellar local companies in our global portfolios – the likes of Glencore, Northam Platinum and Discovery Holdings serve as examples.

Lastly, technology has increasingly levelled the playing field. A desk in London or New York does not guarantee investment success any more than a desk in Cape Town precludes it. The track records of the PSG Global Equity Sub-Fund USD and PSG Global Flexible Sub-Fund USD, both of which are in the top quartile of their respective categories over 1, 3, 5 and 7 years for the period ending 30 September 2025, highlight this. (Source: Morningstar Direct. Full details of the funds are available on our here.)

Differentiated positioning
Significant discount to market - Attractive growth – Active - Diversified 

Sources:Bloomberg, MSCI, PSG Asset Management, top 15 portfolio holdings as at 30 September 2025, valuation (median PE ratio 2025) and median EPS growth based on Bloomberg consensus estimates where available, otherwise PSG Asset Management.

More importantly, however, we believe they are well equipped to continue delivering good returns for our investors, even as the macro environment keeps evolving in unpredictable ways. We continue to find many investment opportunities in unloved and overlooked sectors of the market that are trading at attractive valuations, even as indices (on aggregate) are hovering close to record highs. 

Looking ahead, we believe it will be increasingly important to partner with an active manager who has a proven track record of delivering for its clients through various market cycles. 

When it comes to global investing, there is no point in having a parochial mindset. An integrated approach will be crucial to achieving investment success, not only locally but also globally.

Philipp Wörz is a Fund Manager and Justin Floor is Head of Equities at PSG Asset Management.

PSG Asset Management (Pty) Ltd is an authorised financial services provider, FSP 29524.
The information and content of this article is provided by PSG Asset Management (Pty) Ltd as general information about the company and its products and services and is not intended as, nor does it constitute, financial, tax, legal or investment advice. Past performance is not an indication of future performance and performance figures are used for illustrative purposes only. For further information on the funds and full disclosure of costs and fees, refer to the fund fact sheets.