Should you be investing offshore?

The winds of change
March 12, 2018
Retirement comes sooner than you think
July 17, 2018

This is one of the several very important decisions you are faced with when planning your investment portfolio. What should you take into account when trying to reach the right decision? Is the state of the local economy, good or bad, a factor to consider? Is the SA political scene something you should factor into your decision? What about the fluctuating exchange rate? What about global economic conditions and the part this should play in making a decision about where to invest your hard-earned savings?

Without your having given a direct instruction to have some offshore exposure in your investment portfolio the chances are very good that your Fund Managers will have allocated up to 25% of the funds under management into offshore markets, depending on the mandate of the unit trust fund you have invested in. The Budget released by the Minister of Finance in the last week of February announced an increase of the offshore allowance to 30% for institutional investors and there is a strong possibility that the unit trust industry will follow suit. We will keep you informed of developments as they unfold.

Then there is the question of whether to use asset swap or direct foreign allowance.

Let’s start by saying at FPM we believe that diversification is an essential part of a successful investment strategy. In this case we are talking about geographical and currency diversification that can only happen by investing in offshore markets. Also consider that the SA economy makes up less than 0.5% of the world’s GDP – it makes good sense to have some of your investment exposed to the economies of other countries and to be exposed to other currencies.

If you are in agreement with this one of the next things to consider is whether to invest in developed or emerging market economies? In what proportions?

As you can see, there are many factors to think through before making a decision to invest offshore – or not. At FPM we have several solutions to offer our clients to achieve various goals and our philosophy allows our advisors to give you the tools to make the right decision.

Please call us for advice on this burning question the answer to which is essential for a successful investment strategy.

Wayne Visser
Managing Director
FPM Risk and Wealth Management
011 778 9300


This article is a general information sheet and should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your financial adviser for specific and detailed advice. Errors and omissions excepted. (E&OE)