When to invest offshore?

It has never been easier to invest Offshore.

 

With a multitude investment options, advertisements in the media and conversations from friends around the braai or in the kitchen about the future of our country, the flows to foreign investments have increased significantly over the past few months.

 

But because it is so easy and a hot topic, does it necessarily mean it is the right option for me?

We try to answer the most  frequently asked questions by our clients:

 

I am worried about the future of the Rand and the JSE, do I need to invest offshore?

Local unit trusts can invest in offshore assets. Most Retirement funds invest up to 25% in offshore investments. If you are a more aggressive investor you can go up to 100% offshore exposure on your local unit trusts.

This means if the Rand loses value your investment value increase because of the underlying price of the investment is in Dollars

If the only reason is that you want to invest offshore for Rand weakness or diversification away from the JSE, it is not necessary to invest directly offshore.

 

What is the right reasons to invest directly offshore?

  • To protect yourself from sovereign (country) risk
  • You inherited/earned money overseas and want it to stay in foreign currency
  • You plan to immigrate, travel a lot or your children may study in the future in foreign country it is better to start making provision for the future expenses.

The idea of the money that you are taking offshore is not to bring it back. If most of your liabilities is in South Africa it is better to keep most of your assets (investments) in South Africa.

For a high net worth investor it would be recommended that a part his portfolio be invested offshore.

 

How much can I take out of the country?

South Africa residents over the age of 18 years can now invest up to R 10 million per calendar year offshore.

 

I want to invest directly offshore. What is the options available and what is the minimum amounts to be invested?

There is a number of platforms we can use at Bovest. Sanlam Glacier International, Investec Global Select etc.

Investments on those platforms normally starts at  a lump sup of $ 25 000.

 

Discovery launched a new Recurring Dollar endowment Plan that makes it possible to invest a minimum of $200 per month.

 

To invest offshore differs from client to client and it would be best to contact your Bovest financial adviser and find out whether or not this will be the best option for you.

PJ Botha CA (SA)

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