HOW TO IN­VEST

Finweek English Edition - - COVER STORY -

In­vestors can in­vest di­rectly, or via var­i­ous unit trusts, in­dex funds or ex­change-traded funds (ETFs), or through fund man­agers. There are some plat­forms that re­quire fairly hefty in­vest­ment sums, but in­vestors can find cheap op­tions on­line like PSG On­line and Stan­dard Bank’s Web­trader. San­desh Ganasee, eq­uity sales and trad­ing man­ager at Web­trader, says the plat­form of­fers the whole bou­quet of US in­stru­ments. “If you don’t want to in­vest in in­di­vid­ual stocks, there are var­i­ous ETFs and other in­stru­ments for ev­ery taste or ex­po­sure,” he says, like the SOCL In­dex, a so­cial me­dia in­dex ETF weighted to­wards in­vest­ments in Ten­cent, Face­book and Twit­ter. He ex­plains that many in­vestors us­ing Web­trader choose the Van­guard S&P 500, which is not in­vested only in the tech sec­tor but does in­clude ex­po­sure to the big tech stocks. In­vestors trade in hard cur­rency (dol­lars, euros or pounds), trans­fer it to the Web­trader ac­count from a lo­cal or off­shore bank ac­count and can then be­gin to trade. The rec­om­mended min­i­mum amount is $1 000. Look­ing at fees, for the US mar­ket in­vestors would pay $0.06 per share and in­vest a min­i­mum of $20. For ex­am­ple, says Ganasee, “if you pur­chase Ap­ple shares to the value of $10 000 at around $145 a share, you would get about 68 shares. The com­mis­sion cost would be $20, which works out to 0.2% of the value of the trade.” In­vestors can in­vest R1m a year off­shore with­out ap­proval from the South African Rev­enue Ser­vice, but for in­vest­ments be­tween that amount and their R10m allocation limit, they will re­quire tax clear­ance.

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