By Andrew Brotchie, 3 September 2020
It used to be exclusively for the super-wealthy. Now, offshore investing forms an important part of your portfolio construction. Myriad investors, looking to diversify beyond what is offered locally, are seeing the benefits of taking some of their discretionary money into foreign markets – and not just because of poor performance in local markets.
The South African market offers access to investment in various companies and sectors, but the opportunities in the local market make up less than 1% of the global market. This illustrates the size of the opportunity beyond our borders. Of course, where to invest and the funds to include in your portfolio can be daunting, which is why guidance from a trusted financial services provider is important.
Most first-time offshore investors are apprehensive as the process may be cumbersome and the regulatory environment unknown. Investors are looking for processes that are easy to understand and engage with, and general guidance to navigate this world. They also want a trusted forex service provider to assist with tax clearance and foreign exchange.
For many, investing a few thousand US dollars in a foreign market (which could equate to many hundreds of thousands of rands in current exchange rates), is not within their means, but the world is changing. Lower investment minimums allow for greater access for more individual investors. Products with a lower minimum investment amount widen the opportunities to optimally allocate capital between local and offshore investment products.
a. Has a reputable brand and has been around for longer than a decade; b. Has a strong research capability and the skill to do a deep-dive study of funds and asset managers; andc. Has a long-standing track record in the investment industry.
You don’t want to have to work hard to get information about your portfolio or how it is doing. After all, that is why you are investing offshore.