Investment Management

The Flaw of "Home Bias"

 

Why should a South African investor’s portfolio be constructed differently to that of an investor in another country? As an example, what makes South African investors so reluctant to move beyond approximately 0.75% of the global listed securities universe and start participating in the remaining 99.25% available to them?

It is a much-researched phenomenon known as “home bias” and at RealCap we feel strongly that the vast majority of South African investors are poorly advised when it comes to the management of investment assets. By focusing solely on South African markets, investors are missing out on global opportunities for investment.

Furthermore, South Africa is considered an emerging market – one that is traditionally riskier than developed markets.

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Global Balance Sheet

 

RealCap adopts a global balance sheet approach to investment management which dictates that besides those assets an investor needs to match any local based liabilities - debt, lifestyle expenses etc. - the remaining “growth assets” need to be put to work on a global basis. 

Investing in a portfolio that is diversified not just globally, but also across asset classes, improves risk-adjusted returns by exposing your portfolio to more opportunities and reducing the concentration of risk in one particular geographic market and asset class.

By partnering with RealCap, investors will obtain liquid exposure to the following asset classes on global exchanges:

  • Equity
  • Fixed Income
  • Property
  • Commodities
  • Specialist Opportunities

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