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Investors who hesitate to go offshore because of rand 'strength' should look beyond the headlines. They'll see the rand is a dollar-hero but a euro-wimp.

The tip comes from Anthony Katakuzinos, head of Unit Trusts at STANLIB.

He believes glib references to "the strong rand" are misleading and foster the mistaken belief that offshore diversification is not wise at the moment.

"The picture of a resurgent rand has to be qualified," says Katakuzinos. "The rand has strengthened against the dollar, but so have most currencies.

"Over the two years to the end of 2003 the rand was the best performing currency against the greenback, but a headline-making comeback like this misses the point that long-term depreciation against the currencies of our major trading partners continued over the same period."

Over the last three years, the rand depreciated by 15% against the euro and by more than 10% against sterling.

Internationally diversified investors with heavy US exposure had still made gains, despite dollar weakness.

Those who had selected well balanced global funds or funds with a weighting toward the UK, Europe and Asia had done even better.

The argument in favour of international diversification held good "even in the period of the rand's most dramatic resurgence".

The company favours offshore diversification because:

1. SA represents less than 0.5% of the world economy. Total commitment to a market as small as this is inherently risky. Always makes sense to diversify ones portfolio and over the long terms it helps to build a more stable platform.

2. Only by going offshore can South Africans buy into strong global brands - widening their exposure to blue-chips of global stature.

3. Leading-edge technologies and entirely new industries are found on foreign bourses. They are not yet on the investment horizon in SA.

4. The rand has had a fantastic run and the strong rand provides a wonderful opportunity diversify ones portfolio into other major markets.

Katakuzinos adds: "We still advocate offshore diversification and have done so consistently throughout the recovery against the dollar. The argument that going offshore is foolhardy in the face of a strong rand does not stand up.

"This is a strategic issue, not a timing issue. Those taking a five-year view or longer will find offshore diversification works harder for them year by year."

Editors health warning: Do the numbers, do the research, do the evaluation and needs analysis.