Not only are there no funds with significant exposure to South African equities available for people to sink their money into, there are warnings that the Johannesburg Stock Exchange is unlikely to rise much above the heights it has already reached.
Jim Robinson, international equities director at Laurentian Fund Management, said: 'The problem is that while everyone applauds the political transition taking place in South Africa, private investors should not get too carried away. The reality is that the market, fuelled by foreign investment, particularly from the United States, has already doubled over the past three years.
'Once the current euphoria dies down, the new government will take some time to find its feet. Ironically, I suspect that there will be fund managers lining up even now to launch investment trusts in South Africa.'
Holden Meehan, financial adviser specialising in ethical investments, recently carried out a survey among 1,000 of its investors that showed most wanted to see ethical funds placing some of their money in South Africa. But Mark Dear, a partner in the firm, said: 'While there are some signs that a few companies, such as Merlin Friends Provident, are considering investing in South Africa, if it is in the context of an ethical fund, it would only have a one or two per cent overall exposure in that country.
'The problem with the South African stock exchange itself is that it seems to be composed one-third of mining companies, one-third of financial institutions and only one-third in other industries.
'The best way investors should be considering South Africa at the moment is as an emerging market, with all the volatility that type of investment implies.' Terry Bird, a director at Tilney & Co, the stockbroker, is also sceptical. 'The problem with investing in South Africa is that there are no easy ways to invest there at the moment.'
But Mr Bird said one potentially profitable area in the past few years had been South African bonds, either issued directly by the government or by subsidiary agencies, such as the electricity company Eskom.
Financial transactions are carried out in financial rands, which stand at a discount to the ordinary rand. The present yield on a Republic of South Africa bond expiring in 2010 is 12.7 per cent, enhanced to 16.4 per cent by the ordinary rand rate to sterling-holders.
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