Cape Town - The tricky rand related question asked in South Africa by, especially high net worth individuals and financial advisers, is whether they should take their money out of the country now or not, Japie Lubbe of Investec Structured Products said on Monday.
"Apart from the difficult investment decisions regarding the rand dilemma, people are also currently asking whether it is a good time or not to invest in developed markets," Lubbe said at the launch of Investec's new structured investment product, the USD Wealth Accelerator, which tracks the S&P 500 Index.
He explained that this product is aimed at investors unwilling to take all their money offshore, but who want to benefit from exposure to strong currencies like the dollar.
“Exposure to the US market and US dollar is a useful rand hedge. Investors stand to earn twice the growth in the S&P 500 index over three and a half years up to a maximum of 55%, and this gain will be in US dollars,” added Brian McMillan of Investec Structured Products.
Lubbe also explained that a third challenge for investors at the moment is whether to then expose all their funds to developed markets.
"The problem advisers often have is that they thought they were protected by means of a big spread, but then this does not always pan out," said Lubbe. "With this new product we are saying, let us make sure the client gets his money back," said Lubbe.