{"id":1093,"date":"2020-05-04T15:22:22","date_gmt":"2020-05-04T13:22:22","guid":{"rendered":"https:\/\/affluencegroup.co.za\/?p=1093"},"modified":"2022-08-10T09:59:54","modified_gmt":"2022-08-10T09:59:54","slug":"offshore-exposure-is-key-not-only-now-but-always","status":"publish","type":"post","link":"https:\/\/spiwealth.co.za\/index.php\/2020\/05\/04\/offshore-exposure-is-key-not-only-now-but-always\/","title":{"rendered":"Offshore exposure is key, not only now but Always."},"content":{"rendered":"

When it comes to investments we live in a world of continuous uncertainties and high levels of volatility. And recent events have once more amplified just that.<\/p>\n

Countries and economies don\u2019t function in bubbles. And that is even more evident for us as South Africans, being such a small contributor to the global economy.<\/p>\n

Global markets sentiments and worldwide uncertainty will always have a major impact on us. The health of our government, our economy and our markets will determine to what extend we will be affected. And our country\u2019s finances is currently not very healthy, and will get worse.<\/p>\n

The case for having an offshore investment portfolio:<\/p>\n

1)\u00a0\u00a0\u00a0\u00a0\u00a0The obvious reason being, diversifying your investments and taking advantage of global opportunities.<\/p>\n

2)\u00a0\u00a0\u00a0\u00a0\u00a0The rand will keep on depreciating against all major currencies with their inflation differential. (South Africa have however for the past 10 years depreciated far more than the inflation differential against the USD).\u00a0Your need to protect your asset values in global terms.<\/em><\/p>\n

3)\u00a0\u00a0\u00a0\u00a0\u00a0South Africa makes up less than 0.5% of the world economic activity.<\/p>\n

4) Technology and Biotech shares are not available in South Africa.<\/p>\n

5)\u00a0\u00a0\u00a0\u00a0\u00a0Current economic and fiscal deficits are placing South Africa in a very tight spot, and it will likely become worse before it can improve.<\/p>\n

6)\u00a0\u00a0\u00a0\u00a0\u00a0The current national debt is increasing at an alarming rate and has surpassed the R4 trillion mark.<\/p>\n

\"No<\/div>\n

What are your options?<\/strong><\/p>\n

Unfortunately, clients have limited (30% max) offshore exposure for pre-retirement funds in terms of the current regulations 28.<\/p>\n

However, for discretionary investments and post retirement investments there are no limitations to offshore allocations.<\/p>\n

The current discretionary allowance is R1 million and further R10 million as a foreign investment allowance is allowed annually.<\/p>\n

We have always recommended sufficient offshore exposure on a client to client basis.<\/p>\n

To consider what is adequate for you, you’ll need to take a broader view of your own situation. (The answer will be materially different for each client.)<\/p>\n

What assets do you currently own in South Africa?\u00a0(Domiciled and valuated in Rands)<\/u><\/p>\n