Focusing on enduring trends for long-term growth

From the Government of National Unity’s failure to reach an agreement around its maiden Budget, to Trump’s market-moving “Liberation Day” tariffs and South Africa’s highly publicised diplomatic woes, South African investors have had to contend with heightened uncertainty over the last few months. Local and global markets are shifting at a rapid pace, highlighting the importance of a disciplined investment approach and taking a longer-term view. Twanji Kalula summarises some of the key points covered at our May/June “The Times with Allan Gray” events, as presented by portfolio manager Rory Kutisker-Jacobson.

Elevated market volatility often distracts investors from the underlying fundamentals that drive the long-term value of their investments. Rather than spending the bulk of our research efforts dissecting the market’s response to the daily flow of news headlines, we focus on understanding the enduring trends that shape the prospects for individual companies, sectors, and the broader economic environment. This extensive research is a key input as we analyse the fundamentals of each asset we consider for our clients’ portfolios.

Global consumption trends really matter
Approximately one-third of all goods produced in the world are manufactured in China – yet China’s approximately 1.4 billion people consume just 12% of the goods and services produced globally. In contrast, the United States consumes approximately 29% of global goods and services, while contributing less than 15% to global manufacturing. This imbalance is one of the main drivers behind the drastic reciprocal tariffs announced by US President Trump, which aim to encourage domestic production and reduce reliance on Chinese imports.

Read full article on: https://www.allangray.co.za/latest-insights/local-investing/focusing-on-enduring-trends-for-long-term-growth/

July 10 2025 By Twanji Kalula - Allan Gray