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File Image: IOL

Schroders urges South Africans to be cautious over investment return expectations

By Philippa Larkin Time of article published Sep 14, 2021

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Schroders urges South Africans be cautious over investment return expectations after its latest Global Investor Study found that South Africans were more optimistic than at any point in the past five years, expecting their future investment returns to average 15.2 percent per year for the next five years, an increase of 2.5 percent, since last year.

It found that their expectations were substantially higher than global investors’ expectations of 11.3 percent over the same investment period.

The study is based on the answers and opinions of more than 23 000 savers around the world.

Kondi Nkosi, the head of Schroders South Africa, says: “It’s striking that South Africans have such lofty return expectations. While financial market returns generally performed well over the last 18 months, investors should be wary about extrapolating that this performance will continue into the future.”

Schroders said its economists’ predictions for returns in most developed markets had fallen over the past 12 months.

Stuart Podmore, a behavioural investment insights specialist at Schroders, said, “We need to be cautious over investment return expectations. The outlook shared by many investors – those who see themselves as experts – is exceptionally optimistic.”

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