For the South African investor there are many obvious benefits to investing offshore, with Rand hedge and reducing geopolitical risk, being the most often touted. However, a very important, but often overlooked benefit is the fact that the JSE simply cannot give investors quality exposure to some sectors of major world growth industries. Listed below are some shares which dominate some very sustainable investment themes, were there little or no quality equivalent counters listed on the JSE.
Vestas Wind Systems is listed on the Danish stock exchange and is one of the largest manufacturers of wind turbines in the world, with 2015 annual sales of €10,2bn. Growth in global wind energy usage is expected to grow at 9.9% per annum. Vestas Wind Systems are at the forefront of technological development of newer and more efficient wind turbine structures.
Elon Musk founded Tesla in 2003 and last year added Solar City to the Tesla group. Tesla should not be seen as only a manufacturer of electric vehicles, but rather as a cutting edge renewable energy company. In addition to electric vehicles, it also sells solar panels and solar roofs for energy generation plus batteries for energy storage for residential and commercial properties, including utilities.
Apple after a static period following the untimely death of founder Steve Jobs, has once again powered ahead under the able stewardship of Tim Cook. Apples products run internally developed software and its integration across devices and the Cloud often enables it to maintain premium pricing for its products. It has confounded critics and has continued its stellar growth since Warren Buffet’s Berkshire Hathaway recently acquired a significant stake.
Netflix has revolutionized the way people consume and watch entertainment. Its primary business is streaming video on demand services and is now available in almost every country worldwide. Netflix delivers original and 3rd party material to be viewed on a variety of devices of the user’s choice.
These are but a few examples of companies in cutting edge niche industries that still have good growth opportunities ahead of them and that seek to dominate the industries within which they operate. The question that South African investors should be asking is, why stick only to traditional JSE stocks when there is literally a world of opportunity that is available?