If offshore investing sounds intimidating to you, or you do not have the necessary capital available to commit to the large minimum investment amounts the product providers usually require, a monthly offshore investment is ideal for you!
As our readers know by now, we at Global & Local feel that offshore investments should form a substantial part of any individual’s investment strategy. While the exact allocation amount may differ from one investor to the next, we strongly believe that offshore diversification is important for various reasons, including:
- Expanding your investment portfolio beyond the limited range of products available in our local investment market, especially the small amount of shares available for investment on the Johannesburg Stock Exchange.
- Benefiting from the depreciation of the Rand over the long term*.
- Planning for future international expenses like foreign education.
- Protecting a component of your portfolio from political risk specific to your home country.
*While it is almost impossible to predict exchange rates accurately over the short term, the Rand has been gradually depreciating against developed market currencies since the early 1980s.
When we ask investors why they have not yet taken the leap to invest offshore, unaffordable minimum investment limits and unnecessary complexity is often cited as the main reasons for not expanding their portfolios beyond South Africa. Another hurdle is exchange control regulations. Many investors do not realise that they may invest up to R1 000 000 offshore each year without any regulatory limitations or paperwork.
We are happy to announce that we have teamed up with Dominion Capital Strategies to bring you a straightforward offshore savings option with contributions from as little as $150 (+- R2 850) per month.
Main Features:
- Regular contributions are made via your bank debit or credit card.
- Invest as little as $150 per month, with the option to pause or freeze your contributions at any time.
- Even though the investment is not locked in, and you may redeem your savings at any time, we recommend that you commit to the savings plan for at least 5 years.
- You may nominate a beneficiary for a seamless transfer of the investment, should you pass away.
- Invest in a well-managed global equity fund.
- Benefit from “Rand Cost Averaging” by phasing your investment into the stock market and foreign currency. This reduces the risk of investing at a single point in time at a single exchange rate.
- Foreign interest and dividends are taxable in South Africa, similar to local investment income. Capital gains tax will apply to redemptions.
My Savings Strategy from Dominion is a great way for investors to dip their toes into offshore investing. Unlike rand based offshore investing – also called “Asset Swap” – your investment is fully offshore, and you never need to return the funds back to South Africa. You may redeem your investment into an offshore bank account of your choice.
Once you are comfortable with the investment, you may also choose to make ad-hoc contributions to the investment as and when you have additional funds available. Keep in mind that you will have to apply for clearance should you wish to invest more than R1 000 000 offshore in any given calendar year.
Contact us if you are ready to expand your portfolio offshore in an easy, affordable way!