It’s been a tough year for the JSE. We are only up 1.1% over the past 4 months. In contrast, the MSCI World Index which represents the market cap weighted developed world markets, is up 8.3% in rand. Our emerging market peers are up 5.4%.
We are lagging.
Looking back to the last 1 year of performance, the JSE has had a tough time, returning only 1.6%. The resources sector has been a real drag, returning -6.3% over 12 months. Remember, the resources sector makes up about 30% of our market. Their poor performance was largely a result of a contraction in China due to a serious slowdown in their property market.
The chart below illustrates –
Chart: 1 year performance of JSE vs MSCI World vs Emerging Market vs JSE Resources Sector

The MSCI World index is up over 20% this past year. That’s a massive outperformance.
If you held a 50% local / 50% offshore portfolio you’d be up 10% which is pretty good.
Looking back 3 years, we see the JSE has actually beaten emerging market peers. We returned an annualized 8.75% vs an annualised 3.1% from emerging markets. However, the MSCI World index still dominates performance having generated a 16% annualised return over the same period.
Chart: 3 year performance of JSE vs MSCI World vs Emerging Market vs JSE Resources Sector

There’s been a lot of talk about the South African stock market’s poor performance over the past decade. While it’s true that returns have fallen below historical averages, it’s important to maintain perspective. While not leading the pack, South Africa hasn’t been among the world’s worst performers either.
The chart below shows the 10-year performance of the JSE vs emerging market peers vs the S&P 500 (US) index. We’ve done pretty well compared to other regions in the world.
Chart: 10-year stock market performance across regions

Over the past decade, the JSE generated an annualized return of just over 8% in rand terms. This compares favourably with emerging markets like China (7.8%), Europe (7.7%), Latin America (5.3%), and the UK (5.7%). Notably, even Australia only outperformed us by 2% annually.
Of course, the US market is in a league of its own. Fueled by a strong dollar and the dominance of their tech companies, the S&P 500 returned an annualised 17% in rand over 10 years. That’s incredible.
I’ve written about the US stock market performance here so I won’t spend more time on in.
Rather, I’d say that returning barely over 1% over the past 12 months has been tough for local investors. The funny thing about low returns, though, is that they are usually followed by periods of high returns (and vice-versa).
I recently attended a strategy session by Anchor Capital, a leading South African investment firm managing over R100 billion in assets. They know the local environment well. Their return expectation for the JSE over the next 12 months? 18% (!)
Here’s their return expectation across asset class for local and offshore assets –

Source: Anchor Capital, Strategy and Asset Allocation, 2Q2024
While the recent performance of the JSE has been disappointing, it’s important to remember that these periods don’t last forever. The key to navigating market fluctuations lies in having a well-defined asset allocation strategy aligned with your individual goals.
If you diversified your portfolio with a global perspective, you would have enjoyed the strong performance of the US market. At the same time, having exposure to currently underperforming assets like South African stocks could pay off in the long run, as history show undervalued asset classes often deliver superior returns.
The important takeaway? Don’t chase past returns. Focus on building a balanced portfolio for the long term and seek professional guidance to ensure your investments are aligned with your financial objectives.