Investment managers urge diversification
Investment managers working for Old Mutual Investment Group (Omig) in sub-Saharan Africa has called for diversification of investments to contain threats posed by volatile macroeconomic conditions.
Omig managing directors from Kenya, Zimbabwe, Uganda, Namibia and South Africa made the call in Lilongwe on Wednesday evening during a panel discussion held under the theme ‘Navigating market volatility to optimise investment outcomes’.
During the discussion, the directors cited inflation, currency depreciations, unsustainable corporate debt in local economies and political instability in the regional and global markets as the main investment threats.
Omig Malawi managing director Mark Mikwamba cautioned that unsustainable corporate debt exposes the investors’ fund, particularly if the company does not invest in growth and development.
To navigate the complex nexus between minimising risks and maximising returns, Omig Zimbabwe managing director Marjorie Mayida urged investment managers to diversify their assets across classes and markets.
On his part, Omig business partner for Asset Management Rest of Africa Region Tawuya Nhongo urged investment managers to keep track of global leadership changes to predict policy changes that could affect their investments.
She said: “For example, if [former US president] Donald Trump comes back, he is going to switch the lights back on coal and oil.
“So, you invest in areas that would benefit from that. In the worst-case scenario, investment managers should have strategies to protect their investments.”
On personal investment, the managing directors further urged personal investors to seek direction from investment managers before investing to mitigate risks and maximise returns.
Omig Namibia managing director Lionel Kannemeyer said from an individual perspective, it is important to diversify.
Omig’s advice to investors in sub-Saharan Africa is clear: diversification is essential for navigating the turbulent economic landscape.
By spreading investments across different asset classes and markets, investors can mitigate risks and improve their chances of long-term success, the experts said.
They said as the global economy continues to evolve, staying informed and adapting investment strategies will be crucial for weathering the storm.
Research from the International Monetary Fund shows that stagflation, a period of high inflation and slow economic growth, eroded investments in industrialised and emerging economies.
