Pensioners within the South African environment have long since been subject to various limitations on asset class exposures, both in South Africa and into offshore asset classes. For a balanced mandate with an objective to provide pension fund investors with as smooth a ride as possible given a level of target return above inflation, the fewer limits on asset classes the better. This allows multi-asset managers to take more offshore exposure into a much broader investment universe and avoid some of the concentration risks, particularly within listed equities in South Africa – after all and to quote the age-old adage; diversification is the only free lunch in asset management.

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