Wealth Feature: How did SA investors react to the impact of Covid-19

Faced with one of the biggest global economic shocks in history, it is not surprising that the majority of local investors reacted by changing their portfolios. What is surprising, however, is that almost a third of South African investors (31%) took the opportunity to raise their exposure to higher-risk investments. This finding, which mirrored a broader global trend, was revealed in the recently released Schroders’ Global Investor Study 2019 – an annual survey of more than 23,000 wealth investors, conducted across 32 locations around the world between 30 April and 15 June 2020. Having probed investors about their actions following a period of extreme market volatility – between mid-February and mid-March, when world stock markets lost approximately one third of their value– the study found that 64% of South African respondents made some changes to their portfolio as a result. 31% said they kept their investments “where they were”, while a small 5% were unaware of the turmoil in markets, and so took no action. Of the 64% who did change their holdings as the crisis unfolded, there was a stark divergence in response. A total 47% said they moved “some” or “a significant proportion” of their portfolio to lower-risk investments. But 31% took contrary action, saying they moved “some” or “a significant proportion” in to high-risk holdings. Kondi Nkosi, Schroders country head in South Africa, shares the findings with Michael Avery