Introduction
Sean Kelly of Parity Wealth breaks down a structural shift reshaping global markets and what it means for where you should be positioned. Companies and governments are no longer optimising supply chains purely for cost, security has become the second, equally important question. The result? US tariffs, mineral export restrictions, and a capital-intensive race to secure chips, energy, and critical minerals.
The upshot for investors is a genuine broadening of market leadership. While the Mag Seven has had a lacklustre 2026, emerging markets have returned around 24% and small caps 23% in the first half of the year alone.
Where’s the opportunity?
- Emerging markets – trading at roughly 11.7x forward earnings versus 21x for the MSCI US, with three distinct stories: North Asia (semiconductors), India (domestic consumption), and Latin America (commodities, currencies, rates)
- Europe – cheap at 15x forward earnings, driven less by growth and more by policy-backed capex (US readiness plan, NATO’s 5% GDP spending commitment)
- US small caps – up 23% in H1, another sign of broadening leadership
- Gold and defence – direct beneficiaries of fragmentation, with global military spending hitting $2.9 trillion
But there’s a catch for South African investors specifically. Many already carry meaningful exposure to gold, platinum group metals, and resources, and Naspers effectively acts as a proxy for Chinese tech. Layering on more global commodity or gold funds may not diversify a portfolio; it may simply concentrate it further.
The real work isn’t chasing every trend, it’s understanding what you already own, and positioning deliberately rather than duplicating exposure under a different label.
The real question isn’t whether to chase the trend, it’s whether your portfolio is already more concentrated than you think.
Listen to the podcast below with Sean Kelly and Simon Brown (Moneyweb)
