Navigating offshore opportunities amid global uncertainty

Since the start of the decade, investors have weathered a relentless cascade of shocks, beginning with a market selloff in March 2020 as the world came to grips with the reality of the Covid pandemic. Equity markets then surged ahead throughout 2021, buoyed by optimism around the ‘Great Reopening’, only to quickly reverse direction in the first six months of 2022 as central banks implemented interest rate hikes at a rapid pace to combat an inflation spike that was both higher and more persistent than initially anticipated. Geopolitical crises – from Russia’s invasion of Ukraine to regional tensions in Asia – added further complexity, and in April 2025, Trump’s sweeping ‘Liberation Day’ tariffs then introduced a new era of trade disruptions and regulatory uncertainty.

Today’s markets present a further challenge, one defined less by macroeconomic shocks than by structural imbalance. A handful of AI companies have accounted for 80% of gains in US stocks so far in 2025, creating outsized concentration risks within global markets. Technology stocks now make up over 49% of the S&P 500 index, with the five largest companies alone comprising over 30%. While AI innovation promises genuine productivity gains, such narrow leadership amplifies volatility and heightens downside risk to equity markets. For investment managers, the challenge is not only to enable clients to capture exposure to this potentially transformative technology, but to maintain appropriate portfolio diversification and remain mindful of valuations, which in some instances are becoming increasingly demanding.

With rising concentration risks and ongoing macroeconomic uncertainty, focusing on quality investments is more important than ever. This approach has long been central to Marriott’s investment strategy and is embraced by leading global asset managers. While funds in this category share common traits, each maintains unique characteristics that differentiate them. Marriott’s newly launched Smart International Equity Portfolio leverages our philosophy, offering South African investors diversified exposure to a range of quality-focused funds. It combines access to leading actively managed funds, such as the Fundsmith Equity Fund and Dodge & Cox US Stock Fund, with selective passive vehicles like the iShares Core S&P 500 ETF, striking a balance between professional insight and cost efficiency. In doing so, the portfolio seeks to deliver resilient, risk-adjusted returns though investments in companies with strong balance sheets, established brands and reliable earnings.

The Smart International Equity Portfolio is ideal for investors who believe that long-term ownership of shares in high-quality businesses is an effective strategy for wealth accumulation. Further, because we’ve opted for accumulating funds instead of distributing funds, investors can compound dividends tax-free, with any increase in value subject to capital gains tax rather than income tax upon repurchase. Since its launch at the end of March 2025, the Smart International Equity Portfolio has returned 14.8% to 30 September. This early performance underscores the potential of this diversified, quality-focused and tax -efficient way for South Africans to gain well-considered exposure to global equity markets.

The Smart International Equity Portfolio (SIEP) can be accessed via Marriott’s International Investment Mandate (using your annual individual offshore allowance).