Offshore Exposure

As a Financial Planner, I hear a number of reasons why someone hasn’t considered Offshore investment exposure. These reasons have ranged from ‘I cannot afford investing offshore’ to ‘I do not understand offshore investment opportunities’.

Whilst these reasons may be valid, having offshore exposure may also not be entirely out of your reach!

So, a few points to consider when considering Offshore exposure:

– Identify and establish your Offshore goal and budget

– Offshore investments may perform better at times than other local assets, and having the opportunity to diversify your portfolio and invest in different economies, provides the opportunity to spread your investment risk. Diversification (a mix) of investments is key in managing your capital during market volatility, recession, and a low investment-return environment. It is vital that your portfolio is aligned to your goals!

– There are investments that track an Offshore Index (a weighted average of selected assets) and there are also direct investments in global equity, bond and/or property markets. One can make a single Offshore investment or include an Offshore investment into an existing Investment Portfolio. You could also start by simply paying a few hundred Rand a month in an investment that tracks a World Equity Index, or you could be fully utilising your R1m Offshore allowance and have a fully diversified Offshore Portfolio!

It is important that you consult your Financial Advisor to understand the criteria and options of all available investments, and the Offshore limits that apply to Retirement Funding Investments.

– Offshore investments can be made up to R10m per person. R10m is generally the “life time” limit but excludes the R1m per annum annual amount. SARS has an Online Application process.

– Speak to your local Bank or Financial Servicer Provider as to whether they offer Offshore Bank Accounts where you can directly purchase foreign currency. Most Banks have well established Investment and Offshore divisions that can guide you.

– Tax Free Savings Accounts can also include investments with Offshore Exposure (Investment in Tax Free Savings Account limited to R33 000 per annum)

Offshore investing is not necessarily as daunting as one may have thought, and having the opportunity to diversify your investments into different regions, and to include exposure to Facebook, Amazon, and Apple, may well be within your reach!

Elena Bevilacqua CFP® Professional, Edge Financial Group (FSP 7892), Century City


Elena Bevilacqua CFP® Professional

Senior Financial Planner

BCom Hon: Financial Management


Tel: (021) 555 0839

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