Is investing R15k monthly in a global equity fund wise?

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Two advisors answer this reader's question.

I’m 32 years old and considering unit trust investments. I’m particularly interested in global equity funds. I have ample emergency funds and plan to invest around R15 000 per month. My investment horizon is approximately five, six, or seven years before needing access to some of the invested funds. Marius Fenwick Profile MailWhen people ask me if investing in a particular strategy is wise, I always answer by saying yes. Invest in anything as long as you invest.

Given your age, you can aggressively invest in offshore unit trusts. However, I suggest you earmark offshore funds for longer-term investments unless you have a healthy exposure to SA assets that you can access in an emergency.Due to currency movements, offshore investments carry more volatility than SA investments if measured in rands, and you may just find yourself short-changed if you decide to cash in offshore funds shortly after investing.

Secondly, a comparative analysis of the performance of leading first-world markets, including the US , Europe , and the UK , reveals that the South African market , when measured in rands, has predominantly underperformed relative to the US market :Thirdly, it’s essential to consider the significant depreciation of the South African rand against the US dollar over the last two decades. Specifically, in the last 10 years, the ZAR has seen depreciation exceeding 70% against the dollar.

 

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