Kamini Naidoo

The US has outperformed other global markets in recent years, driven largely by the Magnificent Seven technology stocks. We have held the view for the past year that continued outperformance of US equities would require a broadening of participation across the market. 

The presidency of Donald Trump may further support this broadening market in 2025. However, as was prevalent throughout Trump’s first term in office, elevated volatility is expected in his second term, and the economic impact of his policies is uncertain, with varying growth effects depending on their implementation. 

For emerging market equities, the negative potential growth impact of Trump’s proposed policies on some countries in the region should fundamentally curtail returns by the asset class unless proven unfounded and we currently favour developed market over emerging market equities.

Locally, several challenges that previously hindered the South African economy, such as high inflation, a weak currency and political uncertainty, are now turning into tailwinds. Attractive local equity and bond valuations that still incorporate excessive risk premia should also support returns from these SA asset classes. 

SA cash currently offers investors an attractive prospective real yield, particularly on a risk-adjusted basis. Among the local asset classes, it is only the listed property space where there are conflicting fundamental and valuation signals that make us circumspect about the risk-reward available in this sector.