Carl Chetty

From an offshore perspective, we continue to view emerging market equities as the most attractive asset class going into 2026. A weaker US dollar, driven by structural and cyclical factors, is likely to have positive implications for EM equities relative to developed market equities, as has often been the case in the past. In addition, EM earnings revisions have turned broadly positive, while EMs have also become an attractive way to access the global AI investment theme. Although EM AI valuations have caught up with their DM counterparts, the growth rate expected from EM AI companies is significantly higher.

On the local front, we continue to favour SA equities. The recent strong performance may help rekindle long-dormant foreign investor interest in SA equities, as has already been the case for SA bonds. Furthermore, an increased allocation to EM equities by global investors could simultaneously result in significant global inflows supporting SA equities, particularly given that SA has historically been a high-beta play on EM equities. Despite the strong resource-driven rally in 2025, the SA market, as a whole, remains attractively valued against global peers and its own history.

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