South Africa - Personal
Temporary soft closure of our rand-denominated international funds
As from 27 June 2023, we will no longer be accepting new, direct investments into our rand-denominated international unit trusts. Existing debit order agreements remain intact, and these funds can still be accessed via a selection of Coronation products. To make it easier for affected investors to continue investing offshore, we have reduced the minimum initial investment into our foreign currency denominated funds to only $500/€500/£500.
FREQUENTLY ASKED QUESTIONS
Why are we soft closing our rand-denominated international funds?
The South African Reserve Bank (SARB) Exchange Control Regulations limit each unit trust management company’s ability to invest offshore (the limit is set at 45%). Given that our unit trust management company is approaching this limit, we need to take steps to manage our available capacity in the best interest of all our investors by ensuring that each fund can remain invested according to its specific objectives and mandate limits. The soft close is aimed at reducing new inflows from discretionary investors into our rand-denominated international funds while our capacity remains constrained.
Which Coronation funds are currently soft closed?
The following Coronation funds are closed to any new direct unit trust investments, including via platforms:
- Coronation Global Emerging Markets Flexible [ZAR] Fund
- Coronation Global Equity Select [ZAR] Feeder Fund
- Coronation Global Opportunity Equity [ZAR] Feeder Fund
- Coronation Global Optimum Growth [ZAR] Feeder Fund
- Coronation Global Managed [ZAR] Feeder Fund
- Coronation Global Capital Plus [ZAR] Feeder Fund
- Coronation Global Strategic USD Income [ZAR] Feeder Fund
Which products will not allow any new investments into the above Coronation funds?
The soft close does not apply to all products or account types. See below for a breakdown of which products are impacted.
| Product | Impacted? |
|---|---|
| SA Unit Trust Investments | Yes |
| Living Annuity | No |
| Endowment | No |
| Offshore Unit Trust Investments | No |
| Retirement Annuity | No |
| Preservation Provident Fund | No |
| Preservation Pension Fund | No |
Note that the unaffected products listed above are subject to their own Exchange Control limits. Retirement investments via retirement annuities and preservation funds are always subject to a member-level limit of 45% to offshore assets. Investments placed via endowments and living annuities are subject to the Exchange Control allowance applicable to Coronation Life Assurance (CLA). While CLA is currently below the SARB limit, and therefore unaffected by this soft close, we may have to implement limits for new investors in future if the situation were to change.
What happens to my existing debit order into one or more of the affected funds?
Your existing debit order into one or more of the affected funds will continue as normal under our contractual agreement. Should you wish to change this debit order, no new increases are allowed, but you may reduce or cancel it. However, once you have instructed us to cancel or reduce it, you cannot reinstate it.
What happens if I have an existing phase-in plan running?
Your existing phase-in plan will continue as normal under our existing contractual agreement.
You can switch out of any of the affected funds as usual, but not switch into any of the affected rand-denominated international funds while the soft close remains in place.
When will I be able to invest in these funds again?
We will re-open these funds as soon as there is a sufficient buffer between the offshore assets held in our funds and the prescribed maximum limit, or if there is a favorable change in the SARBs Exchange Control Regulations.
Are there other ways to invest offshore with Coronation?
Yes, investors can use their annual R1 million single discretionary allowance, or subject to obtaining tax clearance, their R10m foreign investment allowance to invest in one of our foreign currency denominated equivalents of the affected funds.
We recently reduced the minimum investment amount required to open an offshore investment account with Coronation from $15,000/£15,000/€15,000 to $500/£500/€500.
Will you notify me when the affected funds are no longer soft-closed?
Yes, we will send out a communication to all Coronation investors. You can also send us an email and we will add your name to the communication broadcast.