Investing offshore is about why, not when
You’re not alone if the thought of investing offshore causes a mix of comfort and confusion
We all know that putting all our eggs in one basket is not a good thing. International diversification is a comforting benefit of offshore investing and gives you access to many global opportunities and industries that aren’t present in our relatively small and concentrated domestic economy.
Offshore investing also gives the comfort of enabling you to optimise your investments. When a portion of your assets is in a currency other than rand, your overall portfolio is more resilient in times of poor market performance and rand weakness in SA.
Most SA investors in balanced funds may already have a considerable international allocation. Pension funds are allowed a maximum allocation of 30%. Confusion may come from not knowing how to invest any further discretionary savings (money not in a retirement fund) offshore. It’s all about knowing where to start.
And with offshore investing, you start with the end in mind. Ask yourself where you plan to spend your savings. The answer will put you on track to making the right offshore investing decisions.
These funds only hold international assets and are managed to maximise returns in foreign currency terms. They require a minimum investment of $15,000 (about R230,000). Alternatively, you can build up capital in rand terms first by investing from R500 per month in a rand-denominated feeder fund, which gives you immediate international exposure.
If you prefer to keep your investments in rand in future, you can still benefit from offshore opportunities while protecting your money against any rand weakness and local price increases of foreign goods.
Coronation Optimum Growth is a rand-denominated worldwide flexible multi-asset fund that manages international exposure for you without constraints, aiming to provide long-term growth in local currency terms.
If you plan to stay in SA but don’t know what portion of your savings should be offshore, it would be well suited to you. If you do know, then consider a rand-denominated feeder fund that only holds international assets.
Investing offshore with Coronation
Find out more about Coronation's range of international funds, managed by a global team with expertise across all asset classes and geographies, read its Corolab guide on investing offshore or speak to your independent financial adviser.
Visit the Coronation website for more information.
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 article was paid for by Coronation.