Looking Beyond the JSE
For years, South African investors have been told to stick to the basics, equities, bonds, and cash. But what happens when the basket you’re told to diversify in keeps getting smaller?
The Johannesburg Stock Exchange (JSE), once a bustling marketplace of over 600 listed companies, has shrunk to fewer than 300. That’s not just a number, it’s a warning. The investment universe is narrowing, and with it, your options.
The Illusion of Choice
If you’re investing in the JSE today, chances are your portfolio is dominated by a handful of giants—Naspers, Prosus, and a few commodity players. These top 40 shares make up over 80% of the index. That’s not diversification; that’s concentration risk.
And while ETFs might seem like a solution, they often mirror the same limited index. So, even if you think you’re diversified, you’re still dancing to the same tune.
Delistings: The Silent Threat
Over the past two decades, the JSE has lost more than half its listings. Companies are delisting due to high compliance costs, low valuations, and better opportunities abroad. New listings? Scarce. Innovation? Stifled. Liquidity? Drying up.
This shrinking pot means fewer opportunities for growth, especially for retail investors. It’s like shopping at a supermarket where the shelves keep getting emptier—but prices stay the same.
Ignorance Was Bliss—Until Now
For many, the JSE was the only game in town. But now, investors are waking up to a broader world of possibilities. Private markets, once reserved for institutions, are opening up. And they’re offering what the JSE can’t:
- Real diversification across sectors and geographies.
- Inflation protection through real assets like property and infrastructure.
- Higher return potential in growth sectors like renewable energy and tech.
- Stable income from private debt and rental-linked investments.
Private Markets: The New Frontier
South Africa’s private equity market is booming, projected to more than double by 2033. ESG-driven investments, infrastructure projects, and tech-enabled businesses are attracting both local and global capital.
Platforms like https://alta-x.com and EasyEquities are making these opportunities accessible to retail investors—offering exposure to solar projects, private equity, and structured income portfolios.
Why This Matters Now
In a volatile economy with the lingering threat of load-shedding, rand weakness, and political uncertainty, relying solely on the JSE is risky. The shrinking number of counters means your portfolio is more exposed to shocks, and less able to adapt.
Private markets offer a way out, a chance to build a portfolio that’s resilient, diversified, and aligned with the future.
How to Get Started
- Educate Yourself: Understand the risks and rewards of private market investing.
- Start Small: Many platforms offer entry points from R500 or less.
- Seek Advice: Work with advisors who understand alternative assets.
- Think Long-Term: Private investments aren’t quick wins—they’re strategic plays.
South African investors deserve more than a shrinking stock exchange and recycled advice. The world of investing is evolving, and so should your portfolio. Don’t wait for the shelves to empty, step into the aisle of alternatives and discover what real diversification looks like.
Your wealth deserves better. And now, better is finally within reach.
