If America Sneezes, South Africa gets a COLD

South Africa accounts for less than 1% of global economic activity and our economy remains more volatile than the established markets of the USA, Europe and Japan.  As an emerging market, South Africa is sensitive to international events and slowdowns in global growth.

The South African rand has therefore tended to fluctuate significantly against developed markets' currencies.  As long as South African inflation remains higher than that of developed markets, offshore assets in developed countries can provide a long-term hedge against local inflation.  By diversifying your investments around the world, you reduce the overall risk of loss should the South African market perform poorly.

Under current exchange control regulations, South Africans are entitled to apply to the South African Reserve Bank to invest up to R2 million in foreign investments – and maybe now is the right time!

Sanlam’s range of FSB approved UCITS III funds are roll-up funds. This means that the funds do not regularly make a distribution of dividends and interest received by the Fund. Instead, any income received by the Funds is used to buy additional shares. Income is only taxed in South Africa when an investor sells shares. 

If an investor requires cash, he/she needs to sell shares.  The proceeds of any sale less the base cost thereof will be subject to capital gains tax if the investor held the investment as a capital asset.  Otherwise normal income tax will be payable on the net profit resulting from the sale.

Because the Funds are registered in Ireland, no VAT is payable on initial and service fees.

You can invest in these products by contacting Sanlam Collective Investments Ltd. or your Sanlam broker/advisor.