Elton James, Head of Sales for Glacier International. South Africa represents less than 1% of the global investment universe and by limiting your investments to only local markets, you’re essentially missing out on 99% of the world’s opportunities. By taking a wider lens on investing, South Africans can access a broader world of opportunities, diversify risk and position their portfolios for long-term success. Elton James, Head of Sales for Glacier International shares five practical tips for unlocking offshore investment success.
1. Think beyond just trying to be tactical and play the currency.
Investing offshore is not just a currency strategy, in fact, over the long term the decision when to switch becomes less important, against the other benefits of investing directly offshore. Global diversification provides access to a wider range of investment opportunities and sectors, better risk adjusted returns and access to markets that are less cyclical while protecting your wealth against inflation and the loss of future purchasing power. So having a longer term, holistic wealth mindset is key to unlocking global investment opportunities.
2. Understand the regulatory, legal and tax implications.
Once you have committed to investing offshore it becomes critically important to understand the administrative, legal, and tax considerations that can impact your investment. Selecting investment solutions that make the process easier administratively, offer tax benefits and ensure that downstream legal complications are avoided is a critical part of the process. A poorly structured offshore investment could cost you more in the long run, through unnecessary fees, penalties, or inefficient estate planning and significantly impact the future value of the portfolio for you and your beneficiaries.
3. Consider using a portion of your retirement savings.
At retirement, you may be entitled to withdraw up to a third of your retirement fund as a lump sum. This provides a useful opportunity to invest part of that capital offshore. In doing so you can match your assets with future retirement liabilities in the same currency. Travel during retirement, overseas education opportunities for children/grandchildren and wealth transfer at death to beneficiaries living abroad, are all future considerations to bear in mind.
4. Choose an investment partner with global capabilities and a strong local presence.
The global investment universe can be a daunting one to navigate and requires specialist knowledge, research and global insights. Choosing an investment partner to assist in portfolio construction and management is a distinct advantage. Your investment partner should be able to demonstrate:
- A credible brand with a team experienced in both local and international markets;
- Robust research capabilities, with the ability to evaluate offshore funds and asset managers; and combine these effectively within a portfolio.
- A track record of consistency and managing portfolios across market cycles and regions.
5. Living local in a global world
Having an offshore investment mindset does not mean turning your back on South Africa, giving up a braai with friends, a Gatsby on a Saturday afternoon or cheering on the Springboks. It’s about embracing the opportunities of a connected world while remaining firmly rooted in the place you call home and not being totally dependent on a single economy to outperform, a currency to always be strong, or a small narrow market to determine your overall wealth.
In closing
Work with a qualified financial adviser who will assess your goals, risk appetite, and time horizon to help you structure an offshore portfolio that complements your broader financial plan. They’ll also guide you through important decisions such as how much to allocate offshore and in which markets to invest.
A high-quality offshore solution should not feel like a black box. Choose an investment that is well-researched, transparent about costs and performance, and backed by regular reporting. You should be able to access your portfolio information easily 24/7, whether through digital platforms or via your financial adviser.
With the right guidance and solutions, you can future-proof your wealth, diversify risk, and access growth well beyond our borders.
Unlock a wider lens on global investing with Glacier International today. DM
Glacier Financial Solutions (Pty) Ltd is a licensed financial services provider. Sanlam Life Insurance Ltd is a licensed life insurer, financial services and registered credit provider (NCRCP43). Glacier International is a division of Sanlam Life Insurance Limited.