As African equities deliver exceptional returns, RisCura argues that understanding the drivers of performance matters as much as the numbers themselves.
Source: Supplied. George Tsinonis, Head: Investment Analytics at RisCura.
African equity markets have delivered exceptional returns over the past 18 months. The RisCura Africa RealView Index (RARI) posted a one-year return of 40.86% as at the end of June 2026, compared with a 34.5% return for Comparator Index A and a 19% return for Comparator Index B over the same period.
When returns are this strong, investors naturally ask whether that momentum will continue. A more useful question is whether asset owners, trustees and investment committees can explain what is driving these returns. Headline returns alone do not provide that answer. The gap between RARI and its comparators is not a quirk of one benchmark provider over another, but reflects genuine differences in methodology, country allocation and sector allocation.
Understanding African equity performance requires looking beyond the headline returns to four dimensions: currency conditions, liquidity, market access and actual portfolio behaviour. RARI's dual-index approach, which calculates both an Official Exchange Rate return and a Realisable Exchange Rate return, illustrates why this matters. Since December 2024, the two measures have been identical every month.
This reflects improved currency and repatriation conditions in Nigeria and Egypt, following their respective currency devaluations. Before December 2024, when currencies such as the Egyptian pound and Nigerian naira experienced sharp depreciations, the Realisable Exchange Rate Index used alternative exchange-rate inputs where official rates differed materially from the rates available to investors seeking to repatriate capital.
“When the official and realisable measures of return start to align, that tells you something concrete about market conditions on the ground, beyond index methodology,” says George Tsinonis, head of Investment Analytics at RisCura.
Beyond headline returns
The 2025 rally was driven by a convergence of disinflation, currency stabilisation, structural reform and a re-rating of frontier and emerging market risk appetite, particularly in Egypt, Nigeria and Ghana, which had been under pressure in prior years. This trend continued into 2026, supported by reform credibility, stronger commodity prices, improving currencies and renewed foreign investment.
In March 2026, African equity markets came under pressure, reflected in RARI's realisable return falling 8.46% before recovering 13.58% in April. The decline coincided with weaker global sentiment linked to geopolitical tensions, as international investors reduced exposure to emerging markets. A trustee looking only at the −8.46% monthly figure would not know whether the movement reflected the portfolio, the market or a manager's decisions without the underlying attribution.
When performance is strong, reporting gaps are easy to overlook. But trustees and investment committees have a fiduciary responsibility to understand why a portfolio performed the way it did, not only that it performed well. Part of that understanding depends on what is actually included in the benchmark used for comparison.
Benchmark context matters
Comparator Index A, for example, does not currently include Nigeria, one of the continent's largest and most actively traded markets. Comparator Index B has a different underlying exposure profile, which means performance comparisons are influenced by differences in index construction, not only market returns. These are not technical footnotes. They directly shape what a benchmark is measuring and what conclusions can fairly be drawn from comparing against it.
“Performance discussions should focus on investment decisions and outcomes. But if the benchmark itself does not reflect the market an investor is actually exposed to, the comparison can mislead even when the underlying numbers are accurate,” says Tsinonis.
Strong returns are worth recognising, but they still need to be properly understood. Investors need to know what sits behind the numbers and whether the benchmark used for comparison reflects the markets and portfolios being assessed.
Better measurement helps asset owners and managers, trustees and investment committees have clearer conversations about performance and the factors behind it. RARI offers a working example of what more relevant, context-aware reporting can look like in practice.
“The goal is to produce a number that investors and trustees can explain with confidence to their own stakeholders,” says Tsinonis.
