Global and local elections: The investor perspective

In a recent interview on CNBC Africa, Kondi Nkosi, Country Head of Schroders Investment Management in South Africa, shared insights on navigating investment strategies amidst global election uncertainties. With over $970 billion in assets under management across various portfolios, Schroders Investment Management takes a disciplined approach to analyzing investment opportunities in both emerging and global markets. While the South African market presents some interesting opportunities for investors, Nkosi emphasized the importance of balancing risk and return when considering investments in the region. The valuation story of certain South African companies has caught the attention of Schroders Investment Management, leading them to strategically allocate funds to capitalize on these opportunities. However, Nkosi pointed out that the decision to invest in South African assets is not uniform across all portfolios, with specific focus on the value proposition and upside potential of individual companies. The ongoing US election, characterized by its historic significance, has also captured the attention of investors worldwide. Nkosi highlighted the potential impact of the election outcome on sectors like energy transition, stressing the need for a flexible investment approach to navigate market volatility. While elections introduce uncertainties in the investment landscape, Schroders Investment Management employs a scenario-based strategy to assess potential risks and opportunities across different geographies. Diversification remains a key risk management tool in mitigating election-induced volatility, allowing investors to maintain a balanced portfolio amid changing market dynamics. Nkosi emphasized the importance of staying objective and avoiding knee-jerk reactions in response to election-related developments, drawing parallels between investment decisions and the strategic considerations in professional sports like tennis. By focusing on the long-term direction of investment trends and remaining grounded in investment theses, investors can make informed decisions that align with their financial objectives.