For the first time in five years, fund managers in South Africa have become net sellers of offshore assets, with many turning to domestic assets.<\/p>\n\n\n\n
Bank of America’s latest South Africa fund manager survey showed that investors are net offshore sellers for the first time after five years of net buying.<\/p>\n\n\n\n
The survey, conducted earlier this month, incorporates the views of 13 fund managers. Bank of America said fewer managers are underweight on international assets, with many becoming sellers.<\/p>\n\n\n\n
When asked whether they intend to increase, decrease, or maintain their offshore weighting over the next three months, a net 15% said that they would decrease their exposure, becoming net sellers.<\/p>\n\n\n\n
Bank of America noted that offshore investments are well off the regulatory requirements, which allow for 45% of assets to be held offshore.<\/p>\n\n\n\n
However, the current figure of 35% is a survey high and was last reached ahead of the 2024 National Election when uncertainty was extremely high.<\/p>\n\n\n\n
The change comes amid heightened global uncertainty, with US President Donald Trump’s tariffs causing widespread panic in financial markets worldwide.<\/p>\n\n\n\n
Although Trump has lowered his tariff on South African goods from 30% to 10%, he has escalated a trade war with China, with the two countries imposing tariffs of over 100% on each other.<\/p>\n\n\n\n
Despite the pullback in offshore assets, South Africa’s picture is not improving, with many fund managers lowering their expectations on GDP growth.<\/p>\n\n\n\n
A net 38% of fund managers expect the economy to get a ‘little weaker’ in April. In March, a net 67% expected the economy to get a ‘little weaker,’ highlighting a rapid shift in expectations.<\/p>\n\n\n\n
The International Monetary Fund has recently slashed South Africa’s growth prospects, cutting its GDP 2025 growth figure by half a percentage point to a measly 1.0%.<\/p>\n\n\n\n
The IMF’s latest World Economic Forecast states that no country will escape the escalating tariff war started by the United States.<\/p>\n\n\n\n
The global organisation said that the impact of the US tariffs will be far-reaching and no economy will escape the shockwaves set to follow.<\/p>\n\n\n\n
South Africa’s internal improvements also took a hit, with a net 38% of managers in the survey also seeing reforms slowing, well below the peak reading of 56% seeing an acceleration in 2024.<\/p>\n\n\n\n
A net 38% of managers think a recession is unlikely, down from a net 67% seen only a month prior. <\/p>\n\n\n\n
Do you intend to increase, decrease or maintain that weighting for the next three months?<\/p>\n\n\n\n
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