HOW TO INVEST
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.