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Hi Conrad

Thank you for the feedback, much appreciated. And thank you for the heads up on the EUR and GBP accounts, I will definitely take that into account as well.

I have one more question though if you don't mind, did you ever consider just buying one of the DBX etfs available before going the WebTrader route? It seems to give me pretty much the same thing, investing in the US/WD via etf, but quite a bit less effort from my side.

Thanks again
J

We have been invested 100% in South Africa for 8 years (and a very good 8 that is) and decided to move some money offshore and invest it. The other reason was after a holiday in the states we realised how worthless the Rand has become which motivated us to move even more money overseas. You take the exchange rate knock really hard but you have to start somewhere. My mentor at work also advised having money offshore is never a bad thing. So the reasoning was to invest in ETF's not dependent on the Rand at all. So at the moment my dividends cover the fees and now to grow it, which is proving very challenging. SCHD has grown by appx 0%, my other shares are up 5% on EUR rate, excluding a 20% drop in EUR/USD exchange rate (this is the biggest lesson i've learnt...)

Ask as many questions as you like, I'm very keen to share what I know, even the little... 

C

Hi Conradl

I am interested in the SB webtrader account as well, but I have a few (stupid) questions.

1) What is the process to transfer money overseas? Do you deposit it into the Webtrader account directly & SB then converts it to USD?
2) Is it fairly easy to buy etfs? I would like to buy 1 once every 2 months or so.
3) Does the account include historical performance of shares etc?
4) Are the trading fees % based or is the $20 the minimum trade value?
5) The monthly cost that you stated as 0.005%, is that the only cost or is there a Rand value monthly cost as well like the normal online share trading account @ SB?

It does seem to be one of the cheaper ways to invest offshore even though its more effort on my side...

Thanks in advance!
J

Hi J,

1. You have to fill in 2 documents at the branch. One for Standard Bank and one for the South African Reserve Bank. Its relatively straightforward, but you give the account number where the funds are held as well as the reference (ie your webtrader acc number). Standard Bank buy the dollars for you (at the current spot rate) and then transfer it to the account in the States.
2. Yes very easy, you type in the code, ie SCHD as I did, and execute the trade.
3. Good question, I haven't looked at what other info the account provides, I use Google to do international research. The webtrader platform is not in same league (wrt to research) as the JSE version that Standard Bank offers. The Webtrader webinars are really good I find.
4. Minimum trade value is $20. I haven't bought enough shares to see whether it becomes % based (That ZAR/USD  )
5. Its deducted from the webtrader account every month. The platform is totally independent from SA. You only get charged on the amounts invested. So if you have $10,000 in cash, you incur $0 in fees. If that $10,000 is invested in my case SCHD, its 0.005% of $10,000.

Webtrader announced on Thursday that they are launching EUR and British Pound accounts on 1 September so then you will be able to have multiple currency accounts. I wish this was the case last year when I started, because of the EUR/USD rate, im losing significant money on a specific share.

The other lesson I'll impart is that before you buy shares that yield dividends, you need to register the GlobeTax people that will recover tax between SA and USA (30% divi tax in the states) for you. They do not recover dividends that you have already received after registering with them. They also only recover tax from US based companies. They do recover from EU/British shares but the costs are INSANE (It was something like $300 for 3 years).

Hope this helps
C

Hi Patrick,

I've started using Standard Bank's Webtrader account. I think its very good as there is no minimum limit that you can start at unlike PSG that wasn't interested unless I had minimum R250k and then they invest it for you...

A few lessons I have learnt in the first year:
1. It's a USD based account so if you buy shares in Germany for example you are subject to USD/EUR exchange rate (duh! I didn't consider that initially). And in the last year that has caused some destruction in value for me. Bought shares at 1.24 EUR/USD and its now 1.13 EUR/USD and even though I'm making a profit, the exchange rate has caused a significant loss. SBG did tell me that they are launching a EUR based account in Q1 (hopefully) and then I hope they can transfer my EUR shares to that account.
2. The fees to transfer money overseas is significant. R200k will cost you R800-00 approximately. And obviously as per standard Bank operation 1% difference between the USD/ZAR spot rate.
3. Monthly fees are linked to the amount invested. I think its 0.005%.
4. Trading fees aren't cheap about $20 per trade

I have been buying myself some SCHD (Schwab Strategic Trust) dividend ETFs as I'd like an overseas income stream and to recover the fees expended.

You are lucky to have a US bank account or an overseas one for that matter...