Model Porfolio Update: Navigating a Turning Point for South African Investors

Feel free to reach out to PSG Wealth Manager Braam Fouche directly.

Positioning for Recovery

At the start of the year, sentiment toward South Africa was negative as usual and most investors and commentators were advocating for capital to be moved offshore, citing ongoing uncertainty and political risks.

Our disciplined, research-driven process led us to a different conclusion. Identified improving local fundamentals, particularly following the formation of the Government of National Unity. Structural repair around ESKOM and Transnet combined with policy collaboration and monetary easing could benefit local markets too.  

This environment, coupled with historically low equity valuations and attractive yields in SA bonds, pointed towards a positive outcome for patient investors in the South African market. Accordingly, we increased exposure to the JSE whilst maintaining exposure to the Bond Market.

The Outcome

This positioning is rewarded as the JSE delivered a strong 31.7% and the Bond Index 14% year-to-date.  

Perspective and Discipline

This year has served as a reminder of the importance of remaining objective and disciplined, even when market sentiment is pessimistic. Our approach avoids emotional reactions, instead relying on valuations, macroeconomic trends, and capital flow indicators.

Looking Ahead

While challenges remain, we view the combination of improving governance, stabilising policy direction, and a potential rate-cutting cycle as supportive of continued growth across South African asset classes. We remain diversified and adaptive, with our allocations guided by valuation and opportunity rather than emotion or headlines.

As always, our focus remains on preserving and growing your wealth through disciplined, evidence-based portfolio management.

Warm regards,

The PSG Wealth – Umhlanga Portfolio Management Team