Cross Border Investing – Hedge your portfolio against the Rand!
There are numerous diversification methods that can be applied to reduce the overall risk of your portfolio. In this week’s blog post we will look at the benefits of offshore exposure and how you can reduce your portfolio’s exposure to the volatile South African Rand (ZAR).
The Rand has been fading away for nearly two decades!
Here is a chart of the USD/ZAR exchange rate over the past 19 years. Remember, the quoting of the pair USD/ZAR, a movement to the upside refers to the Rand (ZAR) weakening against the USD, whilst a movement to the downside refers to the Rand (ZAR) strengthening against the USD.
We can clearly see that the Rand has been depreciating for a very long time.
What can you do to gain offshore exposure?
We live in a much more globalized era than ever before. We have Exchange Traded Funds (ETFs) that are listed on our local stock exchanges that publicly trade as any other listed company on the stock exchange. There are numerous ETFs that are traded in Rand (ZAR) on our local exchanges, but the constituents of the various ETFs are based in the USA, EUROPE and the UK. Therefore, the underlying return generated by the various companies that make up the entire ETF are either USD, EUR or GBP denominated returns.
The benefit of these offshore denominated ETFs are that they give you access to offshore denominated returns, whilst being priced in Rands (ZAR) and listed as local securities. This in turn means that such a form of investment is not subject to capital control measures, you can invest as much as you want, whenever you want.
CAVEAT CAPITAL MANAGEMENT CAN HELP YOU
Would you like to learn more about how ETFs can add value to your portfolio? Visit our website at www.caveat.co.za for more information. Alternatively, find our contact details below to speak to one of our representatives.
Who are we?
Caveat Capital Management is a strategic advisory firm based in Cape Town. Caveat Capital Management specializes in structuring tailor-made investment portfolios that serve your needs now and grow with you as your needs change. Caveat works to maximize your gains and minimize the risk.
What we offer
Caveat Capital Management has a competitive fee structure that incentivizes the portfolio manager to perform and the renumeration is highly linked to the performance of the portfolio. Caveat Capital MGMT (Pty) Ltd is a CATII – Authorized Financial Services Provider (FSP no. 24777) registered at the South African Financial Services Conduct Authority (FSCA). Meaning that we have the required licensing to structure full-discretionary portfolios structured to your needs.
Disclaimer
This report does not guarantee the suitability or potential value of any information or particular investment source. The information provided is not intended to, nor does it constitute financial, tax, legal, investment or other advice. Before making any decision or taking any action regarding your finances, you should consult a qualified financial adviser. Nothing contained in this publication constitutes a solicitation, recommendation, endorsement or offer by Caveat Capital Management, but is merely an invitation to do business.
Contact Information
Main Office
Spaces A1, Kinetic Way Extension, Bridgeway, Century City Cape Town, 7441
Phone
Office: +27 (0)21 830 5777
General enquiries: info@caveat.co.za
Website: www.caveat.co.za
Information and content
The information in and content of this publication are provided by Caveat Capital Management as general information about the company and its products and services. Caveat Capital Management does not guarantee the suitability or potential value of any information or particular investment source. The information provided is not intended to, nor does it constitute financial, tax, legal, investment or other advice. Before making any decision or taking any action regarding your finances, you should consult a qualified financial adviser. Nothing contained in this publication constitutes a solicitation, recommendation, endorsement or offer by Caveat Capital Management, but is merely an invitation to do business.
Caveat Capital Management has taken and will continue to take care that all information provided, in so far as this is under its control, is true and correct. However, Caveat Capital Management shall not be responsible for and therefore disclaims any liability for any loss, liability, damage (whether direct or consequential) or expense of any nature whatsoever which may be suffered as a result of or which may be attributable, directly or indirectly, to the use of or reliance upon any information provided. Past performance is not an indication of future performance. Caveat Capital Management does not provide any guarantee regarding capital or performance.
Caveat Capital MGMT (Pty) Ltd is a CATII – Authorized Financial Services Provider (FSP no. 24777) registered at the South African Financial Services Conduct Authority (FSCA).