Let’s take a quick look at how markets are doing, both locally and abroad.
Year to date:
The JSE is at all-time highs and up over 10% for the year (in rands). In contrast, the US market is down more than 7%, impacted by renewed uncertainty around tariffs and political noise. The MSCI World Index — which is around 70% made up of the US — is also slightly negative.
Chart: Year-to-date performance of MSCI World vs JSE vs S&P 500
1-year returns:
Surprisingly, the JSE has outperformed global markets, delivering a return of 23%. In comparison, the MSCI World is up just over 10%, and the S&P 500 has returned around 7% over the past year.
Chart: 1 year performance of MSCI World vs JSE vs S&P 500
3-year annualised returns:
Offshore markets began to pull ahead around May 2023. The US delivered around 16% per year, with the MSCI World slightly higher at 17%. The JSE, while trailing, still delivered a strong 12% per year — a reminder of the importance of holding growth assets.
Chart: 3-year performance of MSCI World vs JSE vs S&P 500
5-year annualised returns:
Here, the numbers are closer. The JSE delivered nearly 17% per year — slightly ahead of global markets. But context matters: this time frame starts from the COVID crash lows. Very few people had the confidence to invest locally during that period of uncertainty.
Chart: 5-year performance of MSCI World vs JSE vs S&P 500
10-year annualised returns:
This is where US dominance is clearest. Had you invested in the S&P 500 a decade ago, your annualised return in rands would be about 15%. That’s a phenomenal result. By comparison, most other markets, including the JSE, delivered more moderate returns over the same period.
Chart: 10-year performance of MSCI World vs JSE vs S&P 500
So why has the US done so well?
It comes down to a handful of hypercompetitive technology companies – Apple, Microsoft, Meta (Facebook), Nvidia, Amazon, Tesla and Alphabet. If you stripped them out, US returns would look much more ordinary — more in line with the rest of the world. What made these companies so powerful was their ability to grow revenue at a very high rate, year after year, with extremely high margins and minimal capital requirements. They didn’t need to build factories — they scaled through software, data, and algorithms.
The real question now is: can these companies continue growing at the same pace? With market caps now exceeding $2 trillion in some cases, it becomes increasingly difficult. That doesn’t mean they won’t grow — but it does mean that the same level of dominance is no longer guaranteed.
These charts also remind us that markets are cyclical. Over the past five years, we’ve seen leadership in returns shift between South Africa and offshore markets, depending on the period.
No one knows what the next five years will hold.
