WRITES VIA EMAIL: I have been doing a bit of research into offshore exchange-traded funds (ETFs), and a couple of Vanguard products have caught my eye.
My conundrum now is how to actually purchase them, and I happened to stumble upon the concept of offshore wrappers. Are there any particular reputable companies one can approach? What should the fees reasonably be? Do they fare better when compared with offshore brokerage accounts?
RESPONDS: Most of the local long-term insurers and investment houses offer offshore wrapper funds. Costs are very important as one is adding an extra layer of fees on top of the product and platform fees (and maybe even adviser fees). Ideally I would suggest the wrapper should charge less than 1% of the value being invested every year, lower of course is better.
You can also go the local route via the db X-trackers ETFs (from Deutsche Bank). The DBXUS that tracks the MSCI 600 (essentially the same as the S&P 500 index) trades on the JSE or via any of the platforms that offer ETFs. It is fully offshore in that your rands are converted to US dollars before buying the index, so you get exposure to both the US stocks and the currency.