Planning Analyst Vivian Govender responds:
If you view
your entire portfolio as the money in the trust plus unit trust investments, ETFs
and RAs, it will bring you to a grand total of R7.3m. You have indicated
that you are a conservative investor who is debt-free with no income needs over
the next five years.
You will reach age 65 after this period, and I assume would
want to draw an income from your investments. Based on this, the main objective
of your portfolio over the next five years would be growth in excess of
be a good time to establish your current total asset allocation and how this
compares to your investment profile. It will indicate whether you are currently
over- or under-invested in the various sectors of the market, and
provide the ideal opportunity for you to realign your entire portfolio to your
the investment in the trust will be a large amount, a possible option would be
to invest a portion of these funds in a direct equity portfolio through a stockbroking firm.
This will provide active portfolio management and the fee
structure may be more favourable compared to that on a unit trust platform.
This can form a portion of the equity exposure needed in your portfolio.
becomes a greater need, the equity portfolio can be realigned to provide an
income (through dividends).
trust platform can be used to invest the balance of the funds to diversify among
other asset classes, such as bonds and cash. This will also provide access to
offshore funds. Ensure that you further diversify your offshore exposure
through the various asset classes.
the funds invested in the trust are earning interest, which is fully taxable in
the hands of the trust and reduces the real return before inflation has been
taken into consideration.
The equity investments may prove to be more tax
efficient, as tax on dividends is levied at 15% and capital gains tax is only
payable at the sale of the investment.
Do consult a reputable investment adviser, who will analyse your entire portfolio and
structure the investment in the trust in line with your overall investment profile.
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