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The one question to ask when you are thinking about investing offshore

Sep 03 2019 13:29
ADVERTORIAL
Coronation

Where do you plan to spend your money in the future?

So you’re already saving for retirement and have some additional money you’re thinking about investing offshore. If you are unsure how to go about it, just ask where you plan to spend your money in future.

Is it to pay for a child’s international education, visit children living on different continents, or to live abroad yourself?

If these are your kind of goals, then consider investing in a hard currency-denominated international fund. 

Coronation

These funds hold assets selected from all global markets (read about one such opportunity here) and are managed to maximise returns in foreign currency terms. They also benefit from the full externalisation of your assets: not only are they benchmarked against global markets, they are also established and regulated outside of South Africa and denominated in hard currencies. This means that when the time comes to spend your investment, you’ll know exactly what it’s worth - no dependency on rand conversion.

Do I choose a single or multi-asset class fund?

With single-asset class funds (such as a global equity fund), you take your own asset allocation responsibility. The risk is that you may be tempted to switch into or out of an asset class at the wrong time. In times of increased economic uncertainty, we think that most investors are better served by investing in a multi-asset class fund (such as a balanced fund) where the professional investment managers actively vary the exposure to different assets on your behalf. 

Coronation offers two international balanced funds, Coronation Global Managed and Coronation Global Capital Plus which meet different investor needs. Each fund requires a minimum investment of $15 000 (roughly R230 000 at current rates). 

What is the process to invest in such a fund?

South African investors can use all or some of their annual R1 million discretionary foreign allowance, as well as apply to SARS for an additional foreign investment allowance of R10 million per year. Before investing, you first need to convert your rands into foreign currency. Your bank or specialist currency provider can assist in this process. 

What if I want to start investing a smaller amount? 

You can invest from as little as R500 a month in the equivalent rand-denominated feeder fund, which gives you all the benefits of global exposure. You can then switch into a hard currency-denominated international fund at a later date.

Not your type of investment goals?

Coronation offers a range of international funds to meet the many offshore investing needs of South African investors. All our funds are managed by our global investment team with a depth of experience across asset classes and geographies.

For more information about investing offshore you can read our Corolab guide.

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 is sponsored and provided by Coronation

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