Global equities: Resilient amid geopolitical uncertainty?

Global equities have remained resilient amidst ongoing geopolitical uncertainty, sparking discussions on the importance of diversifying investments in such volatile times. Kondi Nkosi, the South Africa Country Head for Global Investment Manager Schroders, recently joined CNBC Africa to share insights on the current political landscape and its impact on global markets. Nkosi highlighted the challenges of predicting the full extent of international trade conflicts under the Trump administration's policies. Despite short-term trends causing market turbulence, Nkosi emphasized the potential long-term opportunities for asset managers to capitalize on amidst geopolitical disruptions. Drawing from historical events, he noted how certain countries benefited from tensions between major economies, presenting investment opportunities in alternative markets. The conversation shifted towards evaluating the implications of geopolitical events, emphasizing the significance of analyzing company fundamentals over macro narratives. Nkosi stressed the importance of companies' profitability, balance sheets, and competitive positioning in driving long-term investment performance. While geopolitical tensions remain a factor in investment decisions, Nkosi emphasized the focus on fundamental analysis to identify investment value. In assessing the concentration risks in the U.S. market, particularly with the MAG7 companies, Nkosi discussed the potential for investment opportunities amid market downturns. By exploring value in diverse markets like China and Europe, asset managers can leverage price dislocations to enhance portfolio returns. Nkosi encouraged investors to consider the long-term drivers of equity returns, highlighting the resilience of strong companies run by competent management teams. Regarding the unpredictable nature of short-term market drivers, Nkosi reiterated the importance of maintaining a focus on company fundamentals and sound investment theses. He emphasized the value of identifying resilient companies that can navigate various economic and geopolitical challenges. Nkosi underscored the role of strong management, local market focus, and investment discipline in weathering market uncertainties. In conclusion, Nkosi emphasized the enduring relevance of investment fundamentals in navigating volatile market conditions. Despite the ever-evolving geopolitical landscape and market dynamics, the core principles of prudent investing remain essential for generating long-term returns and managing risk.