Reasons to be investing offshore - June 2021

Back to contents
Coronation Insights

Coronation Insights

For many discretionary investors (those who have some money to invest beyond what is already allocated to their retirement) it may be tempting to increase or decrease their international exposure for temporary reasons (such as current sentiment, specific currency expectations or recent returns). However, having exposure to foreign asset classes is not about the timing. Instead, it is an allocation that should be made with strategic reasons in mind and one that should form part of your long-term investment, regardless of the point in the market cycle. In this issue, we unpack why investors should be investing offshore, explain how we have been investing clients’ money offshore for more than two decades and detail which of our funds are most suited to investors’ specific offshore needs.

Your decision should be driven by strategic reasons, not sentiment

While it is easy to succumb to the sentiment of the day, allowing it to determine your reasons for investing offshore is a weak philosophy – and there is no better example than South African investors’ reaction to short-term currency moves. The performance of the rand has a long history of significantly impacting how investors perceive international investments. Interest in international assets is typically low when the rand is strong but increases as the rand weakens. This may be a problem if investors inadvertently replace cheap assets with expensive assets purely based on current sentiment. It is thus important for investors to approach their level of offshore exposure with strategic, not temporary, reasons in mind

Investor guide offshore - Coronation.png