It makes sense for most South African investors to invest a portion of their money offshore. This is to spread your money in different countries, currencies and in companies that are not available to local investors. Unit trust funds offer a simple and flexible way to access international stock markets.
carefully selected investment portfolios
You can invest offshore using rands:
- You can use a rand-denominated offshore unit trust fund
- Your investment returns will be in the local currency
- You can start an investment by contributing R2 500 a month. Or a single lump sum of R100 000 or more
- When you make a withdrawal your funds will be paid into your local bank account
You can use a foreign currency to invest directly offshore:
- You have to convert the local currency to offshore currencies
- You must use your offshore allowance of R11 million (R10 million foreign capital allowance and a R1 million single
- Discretionary allowance) per calendar year
- You can have access to your funds from anywhere in the world
- You can start a rand-denominated offshore investment by contributing a minimum of R2 500 a month. Or a single lump sum of R100 000 or more
- If you invest directly offshore using foreign currencies higher investment amounts are required
- Investing offshore gives you access to various assets such as countries, currencies and companies. This can reduce your risk, as not all your money is in one place.
- You can request a regular income payment from the investment
- Professional investments managers manage your money
- Your investment growth is based on the performance of the model portfolio that we select for you
How can I access offshore investments?
Option 1: You can invest in a rand-denominated offshore fund using rands. A rand-denominated offshore fund offers you access to foreign stock markets and currencies. You do not need to apply for a tax clearance as your investment is made in rands. You can start an investment by using a debit order or a lump sum.
Option 2: You can convert your money to an offshore currency by going through the exchange control process. Individuals are allowed to take a maximum of R10 million a year offshore subject to SARS tax clearance and a maximum of R1 million without tax clearance. Once the funds are offshore you can invest in any currency of your choice.
What are the benefits of offshore investing?
- As an investor you gain access to a wider range of industries that are not available in South Africa.
- You can spread your investment risk across different economies and regions.
- You can invest in a wide range of currencies across the world.
- Offshore assets are an attractive option if you want to build a diversified portfolio.
What are the risks of investing offshore?
One of the biggest risks that investors need to take into account is that of currency risk. This can contribute negatively to your investment returns. It is important to understand this risk when making your investment as it helps you manage your expectations.
What is the difference between investing in unit trusts and offshore?
The main difference is the regulations and restrictions that exist between the two methods of investing. When you invest offshore you use unit trust funds as your underlying investments. This means that although your investment is offshore, your return comes from underlying unit trust investments, such as shares, bonds and property.