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Investing offshore: When you want to keep your options open

Sep 30 2019 07:05

So you’re already saving for retirement. But you face a dilemma. You don’t know how much of the additional savings that you have to invest, should be invested offshore, as you don’t have any specific investment goals that require spending in a foreign currency. 

The good news is that you can keep your options open and entrust someone to make the most appropriate decisions on your behalf. By investing in a rand-denominated worldwide flexible fund, such as the Coronation Optimum Growth Fund, you give your money the ability to be invested anywhere in the world and in any asset class, without you having to worry about the details. You don’t even have to convert your rands into foreign currency. 

The fund managers will decide, on your behalf, how much of the portfolio gets invested in international assets (typically between 50% and 90% of the portfolio) and in which asset classes. To find the best long-term investment opportunities for you, they draw on the research and support of a global investment team of 67 professionals who cover equities, bonds and property across the domestic, international developed, emerging and frontier markets. 

Did these opportunities deliver over time?

By focusing on building a fund that comprise of what we believe to be the best long-term investment opportunities across the globe (read about one such example here), Coronation Optimum Growth has delivered a return of 14.4%* per annum (or 8.4% per annum after accounting for inflation) since its inception more than two decades ago. This translates into an increase in purchasing power of 4.7 times, which compares to an increase of 2.4 times your purchasing power had you invested in the developed market equity index (as measured by the MSCI World Index) over the same period.

What do I do if my goals change?

At some point you may want to start investing for a specific goal, such as paying for a child’s international education, or living abroad yourself. If that’s the case, then consider investing in a foreign-domiciled international fund that only holds international assets such as Coronation Global Managed or Coronation Global Capital Plus. These funds require a minimum investment of $15 000 (roughly R230 000 at current rates), or you can invest a smaller amount (starting at R500 via monthly debit order) in the equivalent rand-denominated feeder fund that still gives you all the benefits of international exposure but allows you to build up capital in rand terms first before you eventually invest it in a foreign-domiciled fund. Or you can use some of the capital that you’ve built up in Coronation Optimum Growth for this purpose. 

Investing offshore with Coronation

Coronation offers a range of international funds to meet the varied needs of investors. You can read more about investing offshore in our Corolab guide, or by speaking to your independent financial adviser.

*Returns are quoted as at end-August 2019. For more detail about this fund, please download its comprehensive factsheet here.

The information contained in this article is not based on the individual financial needs of any specific investor. To find out more, speak to your financial adviser.Coronation is an authorised financial services provider.

This post and content is written, provided and sponsored by Coronation
coronation  |  south africa  |  offshore investing

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