Here’s where SA fund managers are looking to invest their money in 2021

In the wake of the global pandemic and economic uncertainty, South African fund managers are eyeing equities as the top investment choice for 2021. The November South African Fund Managers Survey conducted by Bank of America has highlighted a positive outlook for equities in the coming year. John Morris, South Africa Investment Strategist at Bank of America, emphasized that the vaccine potential and positive news surrounding it have transformed the macroeconomic landscape. The survey, which was the most bullish of all in 2020, indicated a shift in sentiment towards equities, with managers increasingly favoring them over cash and bonds. This change in preference can be attributed to the global recovery and the better returns that equities have yielded, with interest rates falling sharply in South Africa. As a result, fund managers are looking to reallocate their portfolios towards equities to capitalize on the anticipated market upturn. Domestic equities, particularly SA Inc stocks, have emerged as the preferred investment choice among fund managers. Sectors such as banks and general retail are expected to outperform in the next 12 months, reflecting a positive sentiment towards the local market. Despite concerns about the consumer sector and weak earnings, fund managers are optimistic about the recovery potential of the stock market. The sharp decline in stock prices earlier in the year, due to the deep recession caused by the pandemic, has created buying opportunities for investors. The market has rebounded significantly since then, with many sectors showing robust growth. While challenges remain, such as consumer uncertainty and headwinds in the market, fund managers are confident in the long-term prospects of equities in South Africa. With a positive outlook for the economy and the global recovery gaining momentum, equities are set to lead the way in investment strategies for 2021.