CIO Greg Hopkins of PSG Asset Management recently asked whether investors are really covering all the risks in their portfolios and points out that investors should not just be insuring their portfolios against the most obvious and visible risks.
“On Tuesday, Stats SA announced that the country’s GDP had fallen by 51% in the second quarter of this year. This was slightly below expectations and for many would have confirmed the consensus view that investors need to be highly aware of, and insure their portfolios against, significant local risks,” Patrick Cairns reports in Citywire.
In the article Hopkins points out that typically that is happening in three ways now. “People are buying a lot of local cash. We have seen a large move from risky assets into local cash. Offshore technology is another example. People think that there are better growth prospects there and are trying to hedge against the rand. And gold is another one that has made its way into many portfolios. This shows that the risks that investors are clearly focusing on are poor government execution on a recovery strategy, the low-growth environment, and rand weakness.”
Click here to read the Citywire article that looks at risks being ignored, exposure and earnings.