Once you have secured your shield funds and have started caring for your future self with tax-free savings and/or retirement savings, you can consider investing offshore. Investing offshore is an excellent way to gain the benefit of diversification, because of the broad universe of investment opportunities available.
Diversification, in the investment sense, is owning a wide variety of investments with different characteristics to help reduce risk. The more uncertainty there is, the more you should diversify. Diversification is often linked to the phrase “don’t put all your eggs in one basket” and this is a useful image to keep in mind. The basket can be seen as sovereign risk or the risk of being invested in one country. The eggs can be seen as investing only in one company or one type of asset class.
However, the image probably overplays the fragility of the eggs and underplays the role of the basket.
For me, a better image of healthy diversification is an American “trick or treat” basket. Americans have a Halloween tradition, in which children walk around the neighbourhood and get treats from their neighbours. They return (having met all the neighbours) with a basket full of many different types of chocolates, chips, biscuits and sweets (treats). It’s a good image on two levels. One, it depicts diversification of thought by engaging with the different types of people in the neighbourhood.
On another level, it's also a useful image for an offshore fund/unit trust which can be seen as a robust basket. The different types of treats can be seen as investments in global companies and global asset classes. This brings us to Investec’s offshore offering. All of our offshore funds are designed to navigate the complexity of investing offshore for a South African investor, making it easy for you to invest.
The underlying investment “treats” are overseen at a macro level by our global investment committee. This group of individuals assesses the current investment risk outlook and determines the allocation to global asset classes in our funds and discretionary mandates. It is a truly global group, with participants from the UK, Switzerland, and South Africa. A diverse group of male and female brains with deep knowledge and experience guide our investment and risk management decisions.
We offer different offshore unit trusts that are designed to meet your offshore goals. Apart from the diversification benefit, it’s always a good idea to match your assets and liabilities. For example, investing offshore would be a good way of planning for saving for a child to go to university overseas or to travel and expand your horizons in the future.
Not sure which fund to choose?
Review our offshore core fund range and choose the fund that meets your investment objectives.
The Investec World Axis range of multi-manager funds, seeks out the world’s best fund managers to create a global, well-diversified portfolio designed for investment growth.
As part of this range, our Investec World Axis Core Fund is designed for investors with investment goals greater than three years. This fund provides investors access to global equities, bonds and cash investments. For investors with investment goals greater than five years, the Investec World Axis Global Equity Fund may be worth considering as it provides higher exposure to global equities.
The Investec Global Leaders Fund is a single-manager fund that is also designed for investors with an investment horizon of longer than five years. This Fund invests in leading, quality global companies with sustainable competitive advantages, providing goods and services to growing end markets. It allows investors to access US, UK and European-listed companies that are true leaders now and expected to continue to lead in the future.
A financial tip – investing offshore obviously involves currency risk. If you are concerned about the level of the currency you are investing at, perhaps invest in tranches to average out the risk, bearing in mind this becomes less meaningful in the long term.
Depending on your needs, we offer you different ways to access our global portfolios. If you need more clarity on whether to access the funds, via an asset swap, directly with your annual offshore allowance or tax-cleared funds or via a feeder fund, please call our team to assist you in getting started with expanding your horizons with your offshore basket of treat investments.