No hedge at all
LOOKING AT SOME recent results and prospects for large South Africanbased companies, the shares that are among the cheapest with share prices that have been battered are those with large operations or sources of revenue overseas.
Those are what colleague Vic de Klerk calls the “new rand hedges”. Right now they’re doing little to protect investors’ rand capital investment money.
Your rand will probably get better protection in a foreign currency fund – as long as you don’t take a huge bet against the future direction of the rand but instead use the fund as foreign currency diversification.
Investors looking for foreign equity exposure would probably also be better off in a fund. Our rand hedge shares – Barloworld and Sappi spring to mind – are doing well in southern Africa but can’t seem to get it right overseas.