Cape Town - Not everyone is a fan of paternalistic prescriptions that restrict investors’ choice of where to invest their money.
Regulation 28 of South Africa’s Pension Funds Act imposes limitations on the extent to which pre-tax income can be invested in equities, bonds, property and cash. More contentious is the 25% cap on a fund’s offshore investment allocation, which limits investor’s ability to hedge against slumps in the local currency.
Considering that South Africa contributes less than 0.05% to global gross domestic product and less than 1% of world stock market capitalisation, these restrictions clearly do impose limitations on your ability to invest abroad.