Is Africa Set to Outperform US Stocks in 2024? A Deep Dive Analysis
In recent years, betting against the US stock market has proven to be a losing trade. However, a closer look at regional markets reveals a potential rally in African stocks that could give American shares a run for their money. VanEck Africa ETF is currently on the rise, closing with a 14.8% gain so far this year, just behind the S&P 500’s 15.8% increase. This outperformance is notable, especially considering AFK’s 12% loss in 2023.
AFK, with a heavy focus on South African stocks, is primarily composed of financials and materials sectors, making it a unique bet on the continent’s market. The recent uptick in South African stocks can be attributed to a weaker US dollar and increased political stability in the region. JPMorgan’s upgrade of South Africa to “overweight” also signals a positive outlook for investment in the country.
While foreign stocks have struggled to outperform US shares in recent years, the resurgence of African markets could signal a shift in leadership. With the potential for increased returns and a diverse investment opportunity, keeping an eye on African stocks in 2024 could prove to be a lucrative move for investors.
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