Offshore investing was once considered the domain of high-net-worth individuals. Today, it plays a central role in modern portfolio construction, no matter the size of your investment. As global markets become more accessible, investors’ needs have evolved to include more diversification across geographies, sectors and currencies in their investment solutions.
Why offshore?
One of the most compelling reasons to consider investing beyond our borders is that South Africa makes up less than 1% of the global investment universe. By limiting your investments to local markets, you’re essentially missing out on 99% of the world’s opportunities. Offshore investing gives you exposure to world-leading companies, diverse industries, and economies that are often more stable or growing at a different pace to our own.
Here are some important tips for investors looking to start or strengthen their offshore journey.
1. Work with a qualified financial adviser.
Offshore investing comes with significant benefits, but it has far more investment opportunities compared to local. A qualified financial adviser 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.
2. Understand the regulatory, legal and tax implications.
Investing offshore isn’t just about choosing the right fund, it’s also about navigating administrative, legal, and tax considerations. Look for solutions that make the process seamless, especially when it comes to foreign exchange, reporting and tax compliance. As with a local investment, a poorly structured investment could cost you more in the long run, through unnecessary fees, penalties, or inefficient estate planning.
3. Use a portion of your retirement savings.
If you’re retiring early or have been retrenched, 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. Doing so offers greater geographic and currency diversification and access to industries that may be underrepresented or unavailable locally.
4. Choose an investment partner with global capabilities and a strong local presence.
Offshore investing requires specialist knowledge and global insights.
Your investment partner should offer:
- Broad range of investment products and funds to build a solution to fit your needs;
- A long-standing, credible brand with experience in both local and international markets;
- Robust research capabilities, with the ability to evaluate offshore funds and asset managers; and
- A track record of managing portfolios across market cycles and regions.
5. Demand transparency, reporting and access.
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 portfolio information easily, whether through digital platforms or via your financial adviser.
In closing
Offshore investing is about more than simply avoiding local economic challenges; it’s about opening your portfolio to a world of possibility. With the right guidance and solutions, you can future-proof your wealth, diversify risk, and access growth well beyond our borders.
Unlock a world of infinite international investment opportunities with Glacier International today.
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.
