A rise in favour of populism in South Africa could see the rand "blow up", according to Joanne Baynham, director and head of investment strategy at Miton Optimal.

She pointed out that the Argentinian peso lost 33% of its value in one day when fears of a populist government provoked a market crash.

"Beware of populism. The EFF is on the corner looking in," she said at a recent International Retirement Seminar hosted by Sovereign in Cape Town.

She pointed out that fear and greed are usually the main drivers of investment decisions. In her view, fear is currently the main driver among investors in SA.

"A lot of South Africans are very worried about the future. I am not saying don't invest offshore but be careful of the ideology of 'take all your money and run'," she cautioned.

In her view, one should not "bash" everything about South Africa, but she admits that one probably needs to have some offshore investments as part of your portfolio for risk aversion.

Then there is what she calls the factor of "Tariff Man Trump" to take into consideration.

"The tariff war is not good and easy to win despite what the US president says," added Baynham.

In her view, China wants to be the number one tech country in the world, making the trade war essentially about intellectual property.

"I feel sorry for President Cyril Ramaphosa, Tito Mboweni and Pravin Gordhan who have to find growth for SA in difficult circumstances," said Baynham.

"Emerging market growth is weak and global growth is definitely slowing. Slowing earnings are concerning and fund managers seem bearish at the moment."

At the same time, she is of the view that the current equity risk premium suggests value is to be had.

She sees opportunities in investment in gold, for instance, as a good diversification.

"My message is to expect lower returns from offshore investments," she concluded.

