Looking beyond South Africa: Why more investors are taking their money into global markets

More South Africans are investing globally, not only to protect their wealth from local uncertainty and rand volatility, but also to access growth opportunities that can help them reach important life goals, whether that's paying for their children's education, buying a home, or building long-term financial security.

The good news? You don't need to live overseas or be extremely wealthy to benefit from offshore investing. Years ago, investing offshore came with high barriers to entry. Minimum investment amounts were high, structures were complicated, and many solutions were designed mainly for high-income investors looking for tax advantages. For younger investors and middle-income families, offshore investing often felt out of reach.

Today, that's no longer the case.

The world is much bigger than South Africa. Global investing gives people access to industries, companies and opportunities that simply aren't available in local markets. Investors of all ages can now tap into global growth opportunities much more easily."

Investing globally to achieve local goals

Many investors are surprised to learn that global investing can play an important role in helping them achieve goals right here at home.

Whether you're saving for a new home, your children's education, or other medium-term objectives, offshore funds can help diversify your portfolio beyond the South African economy, provide exposure to global growth opportunities, and reduce the impact of currency fluctuations.

Inflation is an important consideration

In developed markets such as the US and Europe, inflation is typically lower than what we've historically experienced in South Africa. That means investors also need to think about preserving the long-term purchasing power of their money. Additionally, the rand, like many emerging market currencies, can be volatile and has historically weakened against major global currencies over time. By holding some assets offshore in stronger currencies, investors can help protect their wealth and maintain purchasing power over the long term.

There may be unanticipated tax benefits

Many offshore funds are accumulating funds. Rather than paying out dividends or interest, the income earned is reinvested back into the fund. As a result, investors don't pay income or dividend tax on those distributions. Instead, tax is generally only triggered when units are sold, typically through capital gains tax.

Managing offshore investment risk

Like any investment, global investing involves risk. But risk isn't something investors should avoid entirely. Risk always needs to be managed carefully. At the same time, taking no risk can also limit your opportunities. Therefore, the goal isn't to avoid risk altogether – it’s about taking thoughtful, strategic risk that aligns with your goals.

Professional expertise can make a difference

Every component in your investment portfolio serves a purpose; the objective being to help manage inflation, currency volatility and broader economic risks through a structured investment approach. That's very different from selecting funds on your own and hoping for the best. That’s where the value of an authorised adviser cannot be overemphasised in creating a diversified investment portfolio with your needs and goals, at its centre. 

A world of opportunity is more accessible than ever

Glacier offers offshore investing from as little as R5 000 per month. The contribution is deducted in rands from your South African bank account, while your investment is held in offshore funds denominated in hard currencies.

This makes offshore investing accessible to far more people than it was in the past, especially middle-income investors looking for practical ways to achieve major life goals.

For many years, global investing was seen as something only the very wealthy could do. That may have been true in the past. Today, if you want to explore opportunities beyond South Africa and build wealth globally, there's likely an offshore solution that fits your needs.

Unlock a wider lens on global investing with Glacier International today. DM

Author: Cindy de Kock, Business Development Manager, Glacier International

Glacier International is a division of Sanlam Life Insurance Limited, a Licensed Life Insurer, authorised Financial Services Provider (2759) and registered Credit Provider (NCRCP43) in South Africa | A member of the Sanlam Group | Private Bag X5 | Tyger Valley 7536 | Email clientservices@glacierinternational.co.za | Tel +27 21 917 9333 | Web www.glacierinternational.com | Reg No 1998/021121/06

Sanlam Life Insurance Limited is a Licensed Life Insurer, authorised Financial Services Provider (2759) and registered Credit Provider (NCRCP43).