Investing

640 417 Maysure Financial Services

Unlocking Offshore Investing: A Guide to Allan Gray and Ninety One Investments

Are you curious about offshore investing but unsure where to start? You’re not alone. Offshore investing, often misunderstood as a practice exclusive to the ultra-wealthy, is more accessible and relevant than ever before. In this blog, we’ll demystify offshore investing and explore the offerings of two prominent players in the market: Allan Gray and Ninety One Investments.

Understanding Offshore Investing

At its core, offshore investing involves diversifying your investment portfolio beyond the borders of your home country. It’s about seizing opportunities in international markets, currencies, and assets. Contrary to popular belief, offshore investing isn’t about evading taxes or hiding wealth. It’s a legitimate strategy to optimise returns, manage risks, and access global opportunities.

Why Consider Offshore Investing?

Offshore investing offers a myriad of benefits, including tax efficiency, asset protection, and access to international expertise. By venturing beyond domestic markets, investors can potentially enjoy higher returns and mitigate currency risks. Whether you’re an expat, a frequent traveller, or simply seeking to diversify your investments, offshore investing could be a strategic move for you.

Exploring Allan Gray and Ninety One Investments

Now that we’ve explored the concept of offshore investing and its potential benefits, it’s time to delve into the specifics of Allan Gray and Ninety One Investments’ offshore offerings. These reputable providers offer a range of solutions designed to cater to diverse investment objectives and preferences. From Allan Gray’s tax-efficient Offshore Endowment to the globally diversified funds offered by Ninety One Investments, investors have access to a variety of products tailored to suit their needs. Let’s take a closer look at what each of these providers has to offer in terms of offshore investment opportunities.

Allan Gray: 

Known for its disciplined investment approach and long-term focus, Allan Gray provides investors with access to a range of offshore investment options. From equity funds to multi-asset strategies, Allan Gray’s offshore products aim to deliver sustainable growth while managing risk.

For investors seeking offshore opportunities with Allan Gray, three compelling options await, each tailored to meet specific investment objectives and preferences. The Allan Gray Offshore Endowment stands out as a tax-efficient solution ideal for long-term investors with marginal income tax rates exceeding 30%. This product not only offers tax efficiency but also serves as a valuable tool for estate planning, ensuring seamless wealth transfer to beneficiaries without the burden of executor fees. Additionally, investing offshore through an endowment enables diversification across economies and industries, mitigating investment risks and accessing global opportunities not readily available domestically.

Alternatively, Allan Gray presents two globally diversified funds catering to different investment strategies and risk appetites. The Orbis Global Equity Fund (USD) offers a fully invested approach in global equities, benchmarked against the MSCI World Index. With separate management of currency exposure, this fund provides investors with a comprehensive global equity exposure strategy. On the other hand, the Orbis SICAV Global Balanced Fund (USD) offers a diversified portfolio comprising global equities, fixed income, and commodity-linked instruments. Aimed at earning higher long-term returns than its benchmark, this fund employs strategic asset allocation and limited stock market hedging to manage risk effectively.

For those seeking a more focused approach, the Orbis Optimal SA Fund (USD and Euro) presents a hedged portfolio of selected global equities, targeting superior relative value opportunities. With a primary focus on risk management, this fund employs stock market hedging strategies to reduce the risk of loss while maximising potential returns. Whether you’re prioritising tax efficiency, long-term growth, or strategic diversification, Allan Gray’s offshore investment solutions offer a comprehensive suite of options to help you achieve your financial goals with confidence.

Ninety One Investments: 

Formerly known as Investec Asset Management, Ninety One Investments boasts a global footprint and a diverse lineup of offshore funds. With expertise across equities, fixed income, and alternatives, Ninety One Investments offers investors the opportunity to capitalise on emerging trends and navigate volatile markets.

The Ninety One Global Life Portfolio presents a compelling opportunity for investors seeking a tax-efficient and streamlined approach to offshore investing. With this offshore policy, investors gain access to a diverse range of international funds covering all asset classes, offering an attractive avenue for global market exposure. One of the standout features of the Global Life Portfolio is its tax efficiency, with all tax administration handled seamlessly within the policy. Investors can benefit from attractive estate planning advantages, including no foreign inheritance taxes for South African resident policyholders upon passing away. Moreover, the flexibility and liquidity of the portfolio ensure that investors can access their funds when needed, with options for interest-free loans and surrender permitted within the first five years, and subsequent flexibility for withdrawals or lump sum payouts. With a minimum investment term of five years and no maximum investment period, the Ninety One Global Life Portfolio provides a versatile and tax-efficient solution for investors looking to navigate the complexities of global markets while optimising their wealth management strategies.

Key Considerations for Offshore Investing

Before diving into offshore investments, it’s essential to consider factors such as tax implications, costs, and eligibility criteria. While offshore investing can be tax-efficient and cost-effective, it’s crucial to understand the associated fees and regulations. Additionally, eligibility requirements may vary depending on the provider and jurisdiction.

As you explore the diverse offerings of Allan Gray and Ninety One Investments for offshore investing, remember that each product is designed to cater to specific investment goals and preferences. Whether you prioritise tax efficiency, long-term growth, or strategic diversification, these reputable providers offer a range of solutions to suit your needs. With Allan Gray’s Offshore Endowment and the globally diversified funds from Ninety One Investments, investors have access to tax-efficient vehicles and strategic asset allocation strategies to navigate the complexities of global markets. 

Take the next step in your investment journey with confidence, knowing that you have the expertise and support of these trusted partners behind you.

640 417 Maysure Financial Services

Unlocking Global Prosperity: A Comprehensive Guide to Offshore Investing

Introduction:

Offshore investing, often shrouded in misconceptions, is not just a financial strategy for the wealthy seeking to navigate murky waters. Instead, it’s a legitimate and accessible means for individuals to explore global investment opportunities. 

In this comprehensive guide, we’ll dismantle common myths and shed light on why offshore investing is not only legal, but also a crucial element for building a robust investment portfolio. We’ll journey through the intricacies of offshore investments, covering topics such as Single Discretionary Allowance (SDA), Annual Foreign Investment Allowance (FIA), diverse offshore funds, the importance of global diversification, selecting the right investment options, tracking your investments, and the significance of sound financial advice.

What is Offshore Investing?

The term “offshore investing” might evoke images of secret bank accounts and hidden wealth, but the reality is far from such notions. It refers to the practice of capitalising on investment opportunities outside the borders of one’s home country. This can be as simple as utilising a pension fund that inherently involves offshore investments. Importantly, offshore investing is legal and, in many cases, more common than one might think.

Every South African has a Single Discretionary Allowance (SDA) of up to R1 million per calendar year, allowing the easy transfer of funds abroad without the need for a tax clearance certificate. Whether for investment or travel purposes, this avenue provides a straightforward way to externalise funds. Additionally, there’s the Annual Foreign Investment Allowance (FIA), allowing South African residents an allocation of up to R10 million annually for offshore investments. While this requires a tax clearance certificate, the process is facilitated through a relatively simple online application on the SA Revenue Service e-profile platform. These funds can be freely invested abroad, without the obligation to repatriate them back to South Africa.

What Are Some Examples of Offshore Funds?

Offshore investments encompass a wide array of options, including stocks, bonds, saving accounts, time deposit accounts, mutual funds, real estate, forex trading, precious metals, private equity, and hedge funds. This diversity is a key strength, enabling investors to tailor their portfolios to align with personal preferences, risk tolerance, and long-term goals.

Why South Africans Should Include Offshore Investing in their Portfolio

Diversification is the cornerstone of any sound investment strategy. While South Africa offers its own set of opportunities, relying solely on the local economy could limit the potential for wealth growth. The South African economy constitutes less than 0.5% of the global economy, making it a mere fraction in the grand scheme. Investing offshore allows South Africans to spread their risks across different markets and sectors, providing access to high-growth opportunities that may not be available domestically.

Expanding one’s investment horizon to include global markets also serves as a safeguard against the inherent volatility of local economies. By diversifying, investors can better weather economic storms and position themselves for long-term success.

How To Choose the Right Investment Options

The abundance of offshore investment options can be both exciting and overwhelming. Selecting the right mix requires a thoughtful approach, and this is where the expertise of a qualified financial advisor becomes invaluable. A seasoned professional with experience in the markets can guide investors through the nuances of offshore investing, helping them understand the available options and aligning their choices with individual financial goals.

A qualified financial advisor not only provides insights into market trends but also takes the time to understand the investor’s risk tolerance, time horizon, and overall financial situation. This personalised approach ensures that the chosen investment strategy is not only well-informed but also tailored to the investor’s unique circumstances.

How to Tracking Your Investment

Investing offshore doesn’t mean losing sight of your financial endeavours. Each offshore investment product typically comes with a dedicated platform for tracking performance and monitoring results. Whether it’s stocks, mutual funds, or other investment vehicles, these platforms allow investors to stay informed about the status of their portfolio.

Furthermore, engaging with a financial advisor adds an extra layer of accountability. Regular reviews with your advisor can provide deeper insights into how your offshore investments are performing relative to your goals. This ongoing dialogue ensures that adjustments can be made as needed, allowing for a dynamic and responsive investment strategy.

Taking Sound Advice

In the realm of investments, knowledge is power. While independent research is essential, the guidance of a trustworthy financial advisor is equally crucial. Building a relationship with an advisor who understands the intricacies of global markets and has a proven track record can be a game-changer.

Sound financial advice goes beyond mere market analysis; it encompasses a comprehensive understanding of an investor’s goals, risk tolerance, and overall financial landscape. With the right advisor by your side, you can navigate the complexities of offshore investing with confidence, making informed decisions that align with your long-term objectives.

Conclusion

In conclusion, offshore investing is not a clandestine endeavour reserved for the elite. It’s a legitimate and accessible strategy for South Africans to explore global opportunities, diversify their portfolios, and safeguard their wealth against the limitations of a localised economy. Maysure Financial Services stands as a beacon of expertise, ready to assist investors in unlocking the full potential of offshore investing.

With the Single Discretionary Allowance and Annual Foreign Investment Allowance, South Africans have the means to venture into international markets. By diversifying across various asset classes and engaging with a qualified financial advisor, investors can navigate the complexities of offshore investing successfully.

Embrace the world of possibilities, and let your wealth embark on a global journey. Maysure Financial Services is your trusted partner, providing the knowledge, support, and personalised guidance needed for a prosperous offshore investment experience. As you set sail into the vast seas of international markets, rest assured that you have a reliable navigator at your side, ensuring your financial ship stays on course towards a brighter and more diversified financial future.

640 417 Maysure Financial Services

Your Path to Financial Growth: Exploring Investing Options with Maysure

Introduction

Investing is a powerful tool that can pave the way to financial growth, security, and the realisation of your dreams. At Maysure, we understand that everyone’s financial journey is unique, which is why we offer a wide range of investing options tailored to suit your individual needs and aspirations. In this blog, we will explore the diverse investment avenues that Maysure has to offer, empowering you to make informed decisions and seize opportunities to grow your wealth and secure your future.

Retirement Planning: Sowing the Seeds of Financial Freedom

Retirement planning is a crucial aspect of securing your financial future. Our dedicated team at Maysure is well-versed in designing retirement plans that align with your vision of a comfortable and fulfilling retirement. Whether you dream of travelling the world, pursuing your passions, or simply enjoying a worry-free retirement, our retirement planning services will help you accumulate the funds necessary to achieve your goals.

Shariah Investments and Estate Planning: Nurturing Your Faithful Journey

For our clients of the Islamic faith, Maysure offers specialised Shariah Investments and estate planning services. We understand the importance of preserving the integrity of your earnings, and our dedicated Muslim team ensures that your investments remain Halal and aligned with your values. With our Shariah-compliant investment options, you can invest with peace of mind, knowing that your financial journey is grounded in faith and ethical principles.

Investments – Unit Trusts, Endowments, and Tax-Free Investments (TFI): Maximising Your Returns

Understanding your investment portfolio is essential for maximising your returns. Maysure offers a diverse range of investment options, including Unit Trusts, Endowments, and Tax-Free Investments (TFI). Our expert advisors will guide you through the intricacies of each investment vehicle, allowing you to make informed choices that align with your financial goals. With Maysure, you can ensure that your hard-earned money works efficiently to achieve your aspirations.

Life Cover: Protecting Your Loved Ones

Life is full of uncertainties, and protecting your loved ones is a top priority. Maysure’s Life Cover options provide the reassurance that your family will be taken care of in the event of the unexpected. Our comprehensive life cover plans can be reinvested to provide your family with a stable income and used to cover any outstanding debts, ensuring that your legacy remains untarnished by financial burdens.

Medical Aid: Safeguarding Your Health and Wellbeing

Your health is your most precious asset. A well-structured medical aid plan is fundamental to ensure that you and your family can access the best healthcare without worrying about the cost. At Maysure, we offer comprehensive medical aid options that provide financial support in both day-to-day healthcare expenses and emergency situations, ensuring that you and your loved ones can enjoy a healthy and worry-free life.

Estate Planning: Protecting Your Legacy

Preserving your legacy for future generations is a thoughtful gift to your loved ones. Maysure’s estate planning services safeguard your assets and ensure that your wishes are carried out effectively. By carefully planning and organising your estate, you can protect your family from unnecessary financial burdens and create a lasting positive impact on their future.

Conclusion

At Maysure Financial Planning, we firmly believe that investing is the key to unlocking your financial potential and realising your dreams. Whether you’re planning for retirement, investing in a Halal and ethical manner, or safeguarding your family’s future, we have the expertise and commitment to guide you every step of the way. With our diverse investing options, we empower you to make informed decisions, embrace opportunities for growth, and take charge of your financial destiny. Let Maysure be your partner on this journey to financial prosperity and security. Get in touch with us today, and together, we will pave the way to a brighter and more prosperous future.

Family together and laughing
640 417 Maysure Financial Services

TRUSTS: EFFECTIVE ESTATE PLANNING & TAX-SAVING MECHANISMS

In order to effectively organise your financial security and legacy, you need to start by establishing your estate planning questions. These questions often touch on the complex topic of tax and trusts. To bring these concepts together takes a certain skill and expert understanding. This is where estate planning professionals are crucial.

We’ve put together a guide of some of the fundamentals when it comes to the relationship between trusts, estate planning, and tax considerations. Keep reading to find out if trusts are the right vehicle for you and your family. 

WHAT ARE TRUSTS?

Lady holding pen

A trust can be defined as a tripartite legal relationship that exists between a founder, a beneficiary, and a trustee.

The trust is created by the founder, who places his or her assets in the trust, and then administrative control is given to the trustee. This is often done for the benefit of the beneficiary.

Trusts can provide advantages in several areas, such as:

  • Estate planning and management
  • Asset protection and preservation
  • Maximisation of tax-saving
  • Flexibility and confidentiality

Trusts can also operate independently or form part of a broader financial strategy. They are often used as an instrument to allow for the preservation and transfer of assets between generations. They can also be used as a means to manage and protect your assets, after or during your lifetime.

WHAT ARE THE TYPES, USES, & BENEFITS OF TRUSTS?

Two people discussing finances

In South Africa, there are many different types of trusts available. For our purposes, we will be discussing living (inter vivos) trusts and testamentary trusts. Each type has specific uses and benefits.

A living trust, or family trust:

  • Is established by the founder, or family, during their lifetime
  • Becomes effective at the time of its registration
  • Carries with it the benefit of enabling the wealth-building of its beneficiaries during the lifetime of the founder
  • May be used as a means to protect assets

A testamentary trust:

  • Is created by the terms stipulated within the will of its founder
  • Only comes into effect after the death of its founder
  • Offers the benefit of protecting both minors and vulnerable family members
  • It does not safeguard assets during the founder’s lifetime

There are several questions you can ask yourself to assist you with choosing a trust type.

Do you want peace of mind about the management of your children’s inheritance, and what may be left behind when you are gone?

Or, do you want to protect your current assets and build a lasting stream of growth for your family?

Contact us so we can help you find the right trust for you and your family.

TRUSTS FOR ESTATE PLANNING

Woman in discussion with couple

Setting up a trust, as opposed to a will, is an effective estate planning measure. It can result in faster transfer processes, lower administrative costs, and tax reliefs.

Because the growth of the trust does not directly form part of the estate, and instead belongs to the trust itself, the trust is afforded protection against estate duties (unlike with a will). This will also effectively protect the assets from creditors in the event that your estate goes insolvent.

In addition, it can also be used as a means to specify the type of wealth accumulation that you envisioned for your family assets.

For example, instead of providing a lump sum of capital, or splitting up the funds amongst the beneficiaries, the fund can remain unified, continue to grow, and subsequently be used as a source of consistent income.

ENDOWMENTS AS A TAX SOLUTION

Man putting money in a jar

Trusts are not without their drawbacks though. Two of the major pitfalls in establishing a trust in South Africa include:

  1. Heavy tax burdens on income that is kept at the trust-level (between 36-45%)
  2. The inability of the trust, as an entity, to directly invest off-shore

However, there are effective tax-saving mechanisms that can exist within a trust to counter these disadvantages.

For example: if a trust were to invest in an endowment fund, it would reduce its income tax to a flat rate of 30% and their capital gains tax (CGT) to as low as 12%.

An endowment fund also allows for the creation of offshore investment opportunities. This can not only diversify your investment portfolio, but also act as an effective tax-saving mechanism.

IS A TRUST THE RIGHT MOVE FOR YOU?

There are conditions under which it would be beneficial to set up a trust:

  • If your assets exceed 3.5m
  • When you have minor children or vulnerable family members
  • If you want to retain your family’s wealth well into the future

Before you make your decision, it is vital to know that the creation and management of a trust comes with more administrative requirements than that of a standard investment account.

It is a good idea to make yourself aware of these processes and costs before you make your decision. If your top priority is to save on taxes, then a tax-free investment might be a better option for you.

Start planning your future, today. Contact us on the details below.

+27 11 839 2302

info@maysure.za.com

624 407 Maysure Financial Services

Shariah Investments & Ethical Investing

At first glance, Shariah investments can appear to be quite complex. These assets contain various rules and limitations based on the Islamic faith that governs over all aspects of Muslim life.

These principles state that for any financial service or institution to be considered halaal, their products must adhere to these specific values of social responsibility set out in the Quran. These values speak to transparency, fairness, and accountability.

We are here to help you understand more about the importance of Shariah investments and ethical investing, what options are available to you, and how we can help.

Shariah Investments: An Introduction

Money being saved in box

The Kagiso Islamic High Yield Fund is just one example of an Islamic investment fund that is Shariah-compliant. This fund provides both capital stability and ethical transparency at moderate levels of risk. It also gives much-needed variety to today’s available range of Islamic finance products.

Shariah-compliant investment is different from conventional investment funds. In your traditional investment fund, investors expect to accrue interest over some time, however, in Islamic investments, interest (‘Riba’) is prohibited.

Instead, customers and banks invest and share in profits equally. The risk is shared and thus the impact is lessened, which makes these funds far less volatile than your ordinary investment fund.

It’s important, as an Islamic and Muslim investor, to make use of Shariah-compliant companies when establishing your Shariah portfolio. These companies must adhere to the standards set out by the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI). This body ensures that Islamic investment products maintain Shariah values across all their financial services.

Contact us to find out how you can ensure Shariah compliance throughout all your investments.

Shariah Investments: Importance

prayer and meditation from top

As this industry continues to grow and develop, it becomes vital to share with all of our clients the value and benefits of Shariah investments. In recent times, these funds have gained popularity with other groups outside of the Muslim faith. This is because of a recent surge in the demand for ethical products.

Groups of all faiths, and non-faiths alike, share similar values with Muslim investors when it comes to seeking socially responsible investment solutions, which adhere to environmental, social, and governance (ESG) criteria.

This is what makes Shariah-compliant investing appealing for Muslim investment and beyond. It’s not only beneficial to the Muslim community, but also the rest of the modern world as it caters to these shifts in moral codes and spiritual values.

This is why ethical investing is becoming more prevalent and sought after. Ethical investments provide investors with the ability to generate profits from their invested funds while still ensuring that their moral compass is pointing in the right direction!

Shariah Investments: Requirements

man's hand on trowel gardening

For a fund to be considered Shariah-compliant, it must adhere to the rules set out by the AAOIFI (as guided by the Islamic faith). This organisation helps to ensure the ‘standardisation and harmonisation of international Islamic finance’. It is a guiding body that tries to create uniformity across all Islamic financial sectors.

Within each investment organisation, there must exist a Shariah Supervisory Board, which directs and monitors all Shariah-compliant funds. This ensures financial products are lawful for Muslim consumers.

These boards and regulators allow investors from the Islamic faith to better screen potential new investment opportunities, ensuring these match the rules of their faith.

Shariah Investing: Restrictions

Abundance of treats and desserts

The Shariah supervisory boards and regulators also regulate financial product restrictions and allowances.

Products are not considered Shariah-compliant if they derive majority income from: 

  • Alcohol, tobacco, and pork
  • Production of weapons of mass destruction
  • Conventional financial services and leisure/media
  • Pornography and gambling

Shariah-compliant products include:

  • Equity funds
  • Real estate funds
  • Commodity funds
  • Bonds

The restrictions are wide-ranging and subtle in some cases. As a result, the lines can blur between what is considered Shariah-compliant and what is not. 

It can be a confusing experience to try and navigate Shariah compliance and Islamic investment products alone. As a Shariah-compliant company, our financial advisors are highly knowledgeable about Shariah investing. We can assist you to secure the right funds for your ethical requirements.

Please do not hesitate to get in touch to find out about Shariah investments and ethical investing.

+27 11 839 2302

info@maysure.za.com

624 407 Maysure Financial Services

5 Ways to Spend Your Bonus Wisely

It’s been a long hard year, but the end is in sight. You’ve almost survived the year 2020 and what’s more, you have also been rewarded for your valuable contributions throughout the year – your bonus is in the post.

I’m sure the temptation to splurge a little is strong, especially as the silly season draws near. Let’s be honest – there is no better motivation to keep on reaching new heights than by reaping the rewards of your labours. However, there are a few mental checkpoints you should go through first to ensure that you are being financially astute when rewarding yourself:

1. Clear Your Debt

One solution when facing financial challenges is to get cash flow by taking out a loan. In order to do this, you would need a good credit history, which is made up over the years by you showing a track record of… you guessed it, paying off your debt!

If you did take out a loan during lockdown, you’re not alone in that boat. It can serve as a life jacket to keep your head above water. But, as soon as you receive a cash injection in the form of a bonus, the wise choice is to pay off that debt and get rid of the interest overhead. This is especially true if you have charged to a credit card, where interest is notoriously high.

We asked Zaheer Talia, financial advisor at Maysure Financial Services, what his clients have done with bonuses in the past. He recommended:

“If a bonus is received, previously it was used to settle any outstanding debt – specifically credit card debt. Then, it is used to fund anything that was not budgeted for or expected but is priority, such as the house or car etc. Anything left over would be invested in unit trusts or similar.”

According to *Kenny, one of Maysure’s clients This results in favourable outcomes like the lessening of debt and the growing of investments. Maintenance on the car and house also ensures that these assets do not deteriorate to a huge extent in the future, preventing greater expenses at a later stage.

2. Take Advantage of Your Tax Deductibles

As you can see on page 6 of the Treasuries Tax Guide, there exist certain contributions as per Regulation 28 that are tax-deductible. Examples of these are pension fund contributions, medical aid contributions, and donations to name a few. What this means for you is that up to 27.5% of your gross annual salary can be deducted prior to your tax calculation taking effect.

So, if you were to crunch the numbers and allocate some of your bonus towards ensuring your pension fund contributions maximise that 27.5%, you could easily find yourself dropping down a tax bracket.

Needless to say, the savings involved in such an exercise can be quite eye-catching indeed. As well as serving the purpose of safeguarding your retirement. Exactly the kind of thinking that leads us to our next point…

3. Invest in Your Future

The uncertainty of the current global landscape serves as a timely reminder that life can have its ups and downs. An essential part of your financial planning should be to cater for those periods of decline by ensuring you invest in your future.

Two great examples of doing so are setting up a Tax-free savings account and making sure your emergency fund is well-stocked.

4. Invest in Your Present

With the current theme of working from home coupled with a less intensive social calendar for the foreseeable future, there is no time like the present to start upskilling. This could be something as simple as updating your budget or as exciting as starting that course to help you climb the corporate ladder.

Whether it be embarking on a new entrepreneurial endeavour or finally starting the MBA you’ve been dreaming of for years, it will most likely involve a capital injection. Luckily for you, a timely windfall has just arrived to give you the opportunity to be the best you that you can be. Speaking of which…

5. Spoil Yourself

All work and no play makes Jack a dull boy. Life is about experiences and we each have that something special that is close to our hearts.

Recharge your spirit by tapping into your passion. Spoil your family. Plan for your next holiday (air ticket prices should be good if you can get them in advance). Whatever it is, know that you can afford it because you’ve followed steps 1 to 4 and have been a savvy investor in your own life.

—

Attention: Medical Aid Members

Your Increases for 2021

Discovery

To our valued regular readers and clients, please note that Discovery will be freezing monthly contributions to its medical aid plans for the first half of 2021 – after which it will introduce a price increase – capped at CPI +2%.

Profmed

Turnberry

Please do not hesitate to get in touch for further information or to make arrangements:

+27 11 839 2302

info@maysure.za.com

*Kenny is a fictitious name used to protect the identity of our client.

Sygnia Health Innovation Global Equity Fund
624 407 Maysure Financial Services

Sygnia Health Innovation Global Equity Fund – Ahead of the Curve

We have previously spoken about the idea of offshore investing as a method of diversification into foreign assets. This strategy is usually associated with gaining exposure to the power of the USD. However, it’s equally attractive to be able to participate in global trends and market sectors that are traditionally under-performing and/or under-developed in the local South African context.

The health sector is a prime example, but with the launch of the new Sygnia Health Innovation Global Equity Fund on 5 August 2020, South Africans now have the opportunity to benefit from the watershed innovations happening in the field that will undoubtedly shape the landscape for years to come. And, as can be seen from the below graph, the health sector is a highly lucrative one.

Healthcare as a % of global GDP – PwC Global Innovation Study

Healthcare As a Trend

A sobering fact is that the market cap of the five largest pharma companies (~$1.3 trn) outstrips the size of the JSE (~$1.1 trn). A contributing factor to these impressive numbers is the cutting-edge nature of modern medical advances. As per a PwC report, these advances are being driven by huge investments with $169.5 billion being pumped into research and development in healthcare in 2018 alone. Somewhat surprisingly, this amount exceeds that spent on computing and electronics during the same period.

Another report released by Deloitte in 2019 put the expected annual growth of global healthcare spending at 5.4%, rising to $10.1 trillion by 2022. Notably, this is before taking into account the effects of the Covid-19 pandemic, which have yet to be fully felt.

Another influence on the increasing demand for healthcare services is that of an aging population. Demographic data shows a rise in the average age of many developed countries’ populations. In the USA, the median age has risen to 38 while in the European Union the over-65 age bracket accounts for 19.8% of the population in 2018 – expected to reach 31.3% by 2100.

As per the below graphic from McKinsey Global Institute, the benefits of a healthier population are many and far reaching. As such, the long-term incentives are set to remain for progress in the sector.

Benefits of improving healthcare

Innovations:

While the field is by its nature both complex and diverse, the Sygnia Health Innovation Global Equity Fund’s focus is on companies involved in the following innovations:

–          Next-generation genetic sequencing and targeted healthcare (customised to suit the individual)

–          3D-printed devices (lower cost, highly customised)

–          Virtual reality (simulated training environments)

–          The use of AI in diagnostics

–          Point-of-care diagnostics (fast diagnostics as you wait, the benefit of which has highlighted difficulties faced during Covid-19 testing)

–          Virtual medicine (remote consultations)

–          Biosensors and health monitoring trackers (remote diagnostics)

–          Immunotherapies to extend cancer survival rates

Who Does the Fund Invest In?

Portfolio construction

The Sygnia Health Innovation Global Equity Fund uses a dynamic indexation strategy to select the companies in the fund. As such, any potential investments must be securities traded on developed market exchanges. The Sygnia portfolio manager makes use of the Global Industry Classification Standard (GICS) to gain a weighted top 150 companies index based on free float-adjusted market capitalisation. Also pivotal to the process is using an ESG (Environmental, Social and Governance) screen as a primary criterion. This gives investors peace of mind knowing that they are in alignment with the global trend of good business practice through the principle of impact investing, as seen in the Sygnia OSI Fund.

What Does the Fund Aim to Achieve?

According to Sygnia, the investment objective of the fund is to “deploy capital so as to generate socially impactful and sustainable long-term return, where exceptional performance goes hand-in-hand with changing lives for the better by redefining healthcare – more value, better outcomes, greater convenience, access and simplicity; all at a lower cost.”

In terms of a quantifiable metric, the Sygnia Health Innovation Global Equity Fund aims to outperform the returns of the MSCI World Health Care Net Total Return Index, which is widely believed to be the benchmark for the sector. Boasting returns of 18% in rand terms since 1995, it is clear to see the benefits for investors if this target is met.

MSCI World Health Care Index

For more information on this fund feel free to get in touch:

+27 11 839 2302

info@maysure.za.com

1024 682 Maysure Financial Services

The best things in life are (TAX) free…

We think that its pretty safe to say that South Africans have a long-standing legacy of being big spenders but maybe not the best savers. With a nation that includes the majority barely breaking through the breadline, it’s not an unfamiliar feeling to be left wondering how you’re going to make it through the month.

With extreme levels of consumer debt reaching record heights in 2015, the government took the initiative to introduce a ground-breaking concept – Tax Free Investment Accounts – an incentive to encourage long term household savings.

Since then, financial houses have created quite a buzz about the concept, promoting them at every turn, but what exactly are tax free investment accounts and how do they affect you as the tax payer?

Simply put, a tax free investment account is a type of savings account that allows you to invest your money across a combination of financial products such as unit trusts, fixed deposits, bonds and so forth. The main difference between this and traditional savings accounts is that all your income and returns are completely tax free.

The critical advantage of this type of account is that your growth or earnings are exempt from tax on withdrawal, meaning that you won’t pay any tax when you cash out your investment. You’re also able to reinvest your returns and they don’t count towards your annual or lifetime contribution limit. You’re free to withdraw from your tax savings account at any time you wish, however any replacement investment amount is treated as a new contribution and will therefore count towards your annual and lifetime limits.

So how does it work and are there Limits to Tax Free Savings Investments?

Current regulations allow for an annual contribution limit of R33,000 per tax year, with a lifetime limit of R500,000. Once you have reached your lifetime contribution limit of R500,000 no further investment in tax free savings account will be allowed.

Provided that you don’t invest more than R33,000 in total for the tax year, your investment can be spread across as many accounts as you like. It’s important to remember that the annual limitation can’t be carried over to the next tax year, you simply forfeit any unused amount and are given a new annual limit of R33,000 to invest in the following tax year.

A massive benefit is that if you’re a parent, you’re able to open a tax free savings account for your child(ren), but you need to be aware that any contributions you make to this account on their behalf counts towards their annual and lifetime contribution limit.

Choosing the best investment partner

The benefits and features of tax-free savings accounts in South Africa are pretty much standard, so the important part of choosing the best one for you would be to choose the very best advisors and planners. It is critical that you choose a provider who shares the same goals for your unique investment journey. Some companies are willing to carry greater cost for the sake of better customer experiences and others, will rather take the lower cost and the lower quality customer experience.

At Maysure, we understand that investment is so much more than a game of numbers. It is a personal journey that you and your loved ones are undertaking to cement the future for those most important to you. No two journeys are the same, and no two clients will receive the same advice from us. We listen, we talk, we plan – together. You are more than a client for us, you are an unwritten story that we want to help you write.

We truly believe that knowledge is power, and we want to make sure that you know exactly what your money is doing for you.

It is very important to understand Tax-free saving investments shouldn’t replace other types of investments. Keep your portfolio fluid and focus on all aspects of investing with a suggested priority list from your advisors.

You should never sacrifice your maximum retirement savings or reduce your other financial commitments to invest in tax-free savings accounts. Rather see them as a long term investment opportunity that needs to be nurtured and grown as each financial year passes. Another very important consideration to keep in mind is that Tax free investment contributions are NOT tax deductible like RA contributions are, so this needs to be factored into your discussions with your advisors.

As a human being, you know that you’ll have those days in life that you’ll be faced with unexpected expenses. And you’ll either be wishing you had some savings, or you’ll be thanking yourself for saving in the past.

So where to from here? Tax-free investment accounts are a fantastic long-term investment product. Do not use them for your day-to-day savings, do not use them for your emergency fund, do not replace your retirement annuity and do not go into debt to invest in them. Rather speak to us, let us look at your portfolio and advise you on the best way forward. Once all aspects of your financial planning are in order then let us create a road map for the best way to achieve tax free financial growth on further planned investments.