Investing offshore on a low risk basis

In our Communiqué last week we focussed on investing directly offshore as part of a diversified portfolio and, in particular, given the current economic and political climate in South Africa, the apparent wisdom of taking money out of the country,

There are essentially two major risks counter-balancing your decision to invest offshore: Firstly, there is the risk of delaying your decision and the SA Rand depreciating further and, secondly, the current risk of equity markets worldwide. On the first point, the bulk of opinion in the investment world seems that the SA Rand will almost certainly depreciate into the future. As far as current risks in equity markets worldwide are concerned, we believe that fund choice is key to successful offshore investment.

Due to the current volatile climate, Silke Financial Services researches those funds which aim to preserve capital while gaining respectable growth. One such offshore fund that Silke Financial Services has identified is the Orbis Optimal SA Fund. This fund is specifically available to South African investors via the R2m offshore allowance and/or if you have funds offshore. The Orbis Optimal SA Fund is a replica of the Orbis Optimal Fund which is now closed to non-South Africans.

The Orbis Optimal SA Fund seeks capital appreciation on a low risk global portfolio. The Fund aims to serve investors seeking low risk investment and augments a focussed portfolio of selected equities with hedging of the risk of monetary loss arising from a decline in stockmarkets. The returns are intended to be largely independent of the returns of major asset classes such as cash, equities and bonds. The Fund is offered in US Dollars or Euro. *¹

The Orbis Optimal SA Fund is likely to perform very well in times of global investment turmoil. History shows us how the Orbis Optimal Fund handsomely outperformed the negative performance of the Average of Global Equity Funds during times of recession [from 1990 to 1992 and from 2000 to 2002].

Note*¹: Source: Prospectus of the Orbis Optimal SA Fund

Silke Financial Services has the skill and knowledge to provide expert advice on local as well as offshore investments.

If you have any queries regarding the above commentary please contact us on 021 683 3380 or info@silke.co.za.