Three offshore ETFs to consider
Offshore investment is no longer the risky business it used to be and when considering your options, ETFs cannot be ignored. To pique your interest, here are three that are in the top 100.
investors have a tendency to choose sides when it comes to the investment world and in many cases, simply out of greed, also then tend to make the wrong investment choices. Globally, investors have thousands of funds to choose from, each with its own colourful brochure arguing why it’s likely to outperform this stock market or that benchmark.
The reality, however, is that only a few of them actually manage to outperform underlying indexes consistently. By using our Domestic General Equity Unit Trust sector’s performance over the past 12 months as an example – most of which use the FTSE/JSE All-Share Index as a benchmark – like many other years, only 30% of all the funds in this sector managed to outperform this index in the last year (up to 26 October).
I don’t want to take up the debate between active versus passive management again. In fact, I would like to move away from local investments completely this week and rather turn readers’ attentions towards offshore ETFs and more importantly, to alternative investment options.
I’ve mentioned before that offshore investment isn’t nearly as dangerous or arduous a task as it used to be. An individual may invest up to R1m on a one-off basis, without tax clearance, or up to R10m per calendar year with Sars tax clearance. The opening and management of offshore equity – and ETF portfolios – has been simplified to such an extent that it certainly can’t be ignored as an investment option any longer.
ETFs are highly tradable funds listed on the stock exchange with the goal of yielding 100% of the returns of a specific index, such as the MSCI World Index, for example. As with shares, these ETFs can be bought or sold on any global exchange. With such an abundance of options available, however, I will only discuss three of these funds this week.
As passive as ETFs may sound, it has become the fastest growing investment field worldwide, definitely making it an investment option worth considering in your portfolio.