The JSE and finance forum for South Africa

General Category => Shares => Topic started by: Patrick on February 06, 2015, 10:11:28 am

Title: Anyone here invest offshore?
Post by: Patrick on February 06, 2015, 10:11:28 am
I'd love to hear some details. Do you do it through a local broker/foreign broker? Anything else you could add would be great.

Thanks,

Patrick
Title: Re: Anyone here invest offshore?
Post by: Moneypenny on February 06, 2015, 11:03:15 am
Yes, but that's the big money, left to the professionals, don't do it myself.
Title: Re: Anyone here invest offshore?
Post by: [email protected] on February 07, 2015, 07:40:10 pm
I use Td Direct investing (formally Internaxx).  Can be found here.  http://int.tddirectinvesting.com/  I'm very happy with them and has served me well over the years.

Although i must admit, there is a far better selection of local brokers offering international products now than when i first opened my offshore account.  I haven't done detailed research, but i'm sure you can find one that offers you want you need.
Title: Re: Anyone here invest offshore?
Post by: jaDEB on February 08, 2015, 11:00:05 am
I do not invest offshore, Only invest in 100% SA shares. Take your pills jaDEB....monumental pause ...............  :wall: ......

I invest in JSE only, but currently will only put my monies is shares that has high offshore income. i.e. NASPERS / ASPEN.
Title: Re: Anyone here invest offshore?
Post by: Moonraker on February 08, 2015, 01:29:32 pm
See What's the best way to invest offshore? (http://www.moneyweb.co.za/moneyweb-master-your-money/whats-the-best-way-to-invest-offshore)

Quote
If you value simplicity, and don’t particularly want to expatriate your assets, there are a number of rand-denominated offshore unit trusts accessible locally. The advantages of this route include lower entry levels in terms of how much you have to invest and relatively few administrative requirements.

You can also invest without the need to use your offshore investment allowance, which means you don’t need to buy foreign currency or get tax clearance from SARS. The investor gains access to offshore markets through an asset swap mechanism, although they are still exposed to currency fluctuation.

I am too old and lazy too emigrate (did it twice before, once to Germany and once to Portugal, like Orca), but would go the asset swap route as a ZAR based investor. Charges are pretty high whatever you choose.


Title: Re: Anyone here invest offshore?
Post by: Patrick on February 09, 2015, 02:14:15 pm
Thanks Moon and xxx I'll check them both out. I'm hoping to avoid the fees and hassle by using my US bank account. I can choose to get paid in SA or in the US, so hopefully I won't have to pay money to convert currency too.
Title: Re: Anyone here invest offshore?
Post by: conradl on February 11, 2015, 06:26:10 am
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...
Title: Re: Anyone here invest offshore?
Post by: JohnnyH on July 30, 2015, 02:27:12 pm
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...

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
Title: Re: Anyone here invest offshore?
Post by: JohnnyH on July 30, 2015, 02:47:26 pm
I should have Googled a bit more before asking...haha :whistle:

Link below regarding the SB Webtrader account for anyone interested.

http://www.moneyweb.co.za/investing/offshore-investing/offshore-trading-costs/
Title: Re: Anyone here invest offshore?
Post by: Patrick on July 30, 2015, 04:24:56 pm
I should have Googled a bit more before asking...haha :whistle:

I'd have lost my job many times over in the past without access to google!

On the topic of foreign investments, I'm currently looking into opening an account with http://www.keytradebank.lu/
Title: Re: Anyone here invest offshore?
Post by: gcr on July 30, 2015, 05:31:02 pm
Presently I am in negotiations with my broker to open a trading operation in London.
I have all the necessary documentation that needs to be signed but there are a few questions I want clarity on
 My broker advises that I don't have to get SARS approval provided I more no more than R 1.0 mill per annum
I will be able to look at my portfolio in a similar way as I can look at my local portfolio - so I would be able to watch growth/losses
However I won't be able to trade over the overseas platform myself - I will have to give my local broker an instruction (verbal or written) to buy/sell shares
It appears that I need to determine up front in which currency my portfolio should be (I want to find out if I can't have 3 trading account within one overall account - I want to be able to buy shares in Euro's GBX , or USD - I don't want to suffer exchange rate fluctuations in moving funds from one trading account to another
The funds in my trading account (s) will be totally off shore and I would have to declare such holding in my bi annual tax returns - foreign assets

However as I say I have a few questions to which I need answers and have a full understanding of the nuts and bolts before I let the money go out of the country

So as and when I get more details and clarity I will report back to this thread 
Title: Re: Anyone here invest offshore?
Post by: JohnnyH on July 30, 2015, 07:02:50 pm
I should have Googled a bit more before asking...haha :whistle:

I'd have lost my job many times over in the past without access to google!

On the topic of foreign investments, I'm currently looking into opening an account with http://www.keytradebank.lu/

That looks interesting, thanks Patrick.

I guess the main reason I like SB Webtrader is the relative ease of access it gives me, or at least it looks like it would.
Costs seem reasonable and I definitely want to have a DIY solution. I really just want to buy some of the good US ETFs once in a while & forget about the money otherwise. So recurring monthly costs are a big deal for me.

I was wondering if I should buy the DBXWD etf while I think this over...it seems to "grow" whenever the Rand weakens, which I guess, is part of why I want to do this in the first place.

Any comments on the DBXWD guys? The only thing I don't like about it is the management costs as specified in the SENS announcements when they pay out dividends.
Title: Re: Anyone here invest offshore?
Post by: Qess on July 30, 2015, 07:51:28 pm
I'm new to investing, and the DBXWD is one of the ETFs that I've chosen for my TFSA. Granted, the TER of 0.684% isn't the lowest out there, but looking at their returns over the last 3-5 years also isn't anything to sneeze at.
Title: Re: Anyone here invest offshore?
Post by: Orca on July 30, 2015, 10:43:45 pm
I'm new to investing, and the DBXWD is one of the ETFs that I've chosen for my TFSA. Granted, the TER of 0.684% isn't the lowest out there, but looking at their returns over the last 3-5 years also isn't anything to sneeze at.

You sure have a winner there Qess. That even beats STXIND over a long term. I haven't worked out how the higher TER will compare though. At a glance, it seems that the two will be the same but I'm sure Patrick will do the sums.
Title: Re: Anyone here invest offshore?
Post by: Qess on July 31, 2015, 11:19:29 am
You sure have a winner there Qess. That even beats STXIND over a long term. I haven't worked out how the higher TER will compare though. At a glance, it seems that the two will be the same but I'm sure Patrick will do the sums.

Thanks, Orca. I really hope it continues on like this, that's for sure. If Patrick does decide to do a few sums, I hope he will share the formula on how to work it out so that I can check out a few other ETFs as well :) I really want to get the biggest bang for my buck in this TFSA.
Title: Re: Anyone here invest offshore?
Post by: conradl on August 02, 2015, 09:34:04 am
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  :mad: )
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
Title: Re: Anyone here invest offshore?
Post by: Orca on August 02, 2015, 12:01:02 pm
The DTA between USA and SA has a cap of 15% on dividends. You will need to ask your broker for the appropriate form to get the reduction from 30% to 15%.
Title: Re: Anyone here invest offshore?
Post by: conradl on August 02, 2015, 01:07:07 pm
 >:D
The DTA between USA and SA has a cap of 15% on dividends. You will need to ask your broker for the appropriate form to get the reduction from 30% to 15%.

That's why I mentioned Globetax, Standard Bank don't do it.
Title: Re: Anyone here invest offshore?
Post by: JohnnyH on August 03, 2015, 07:55:03 am

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  :mad: )
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 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
Title: Re: Anyone here invest offshore?
Post by: conradl on August 03, 2015, 05:39:01 pm
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...  ;D

C

Title: Re: Anyone here invest offshore?
Post by: JohnnyH on August 04, 2015, 03:27:32 pm
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...  ;D

C

Thanks for the feedback!

I am a bit unsure on when it would be a good time to move ZAR->USD, but I guess some months it would be expensive & other a little less so. I am looking to possible move R10k pm ( its really depressing that 10k is only worth ~790$ currently ) but I might do it every second month rather to minimise the admin. Its a pity that we can't transfer money in electronically & then just convert whenever I feel like it...

Btw, how did you decide on the SCHD etf? I will definitely only be buying US etfs initially so I am not too worried about the USD/EUR exchange rates.

Cheers
J
Title: Re: Anyone here invest offshore?
Post by: Lamak on August 04, 2015, 06:24:31 pm
Hi. Just slightly off the gradient. Did any one think of investing in Mauritius?  I would like to know your thoughts...thanx
Title: Re: Anyone here invest offshore?
Post by: Orca on August 04, 2015, 08:18:32 pm
I don't want to burst your bubble now but have you people thought this through? Has the $ gained in strength against all major currencies? If so, then the ZAR is not weakening as much as it looks on paper and will correct back down again. It might just be at the peak now and you will be buying the $ at a high.

When I last looked, the ZAR was depreciating at -3% pa and this is insignificant when you take into consideration that SA market as an emerging market by far outperforms developed markets.

Perhaps your view is politically motivated but SA has a very strict and solid financial system in place to the extent that the UK and USA sent representatives to study SA's SARS and SARB system after the 2008 fiasco.

You might have forgotten the 2008 bank implosion that never affected SA banks due to the strict regulations FSB has in place.

I could quite easily withdraw all my money with a simple email but I see SA as a more lucrative market to be in.





 





Title: Re: Anyone here invest offshore?
Post by: jaDEB on August 04, 2015, 08:58:09 pm
Orca, as per your beautiful picture u showed of overlooking your area you posted previously, I thought I will take a picture of when I overlook my beautiful area.

Oh, wait, it is frikkin load shedding again.

Title: Re: Anyone here invest offshore?
Post by: Orca on August 04, 2015, 09:59:29 pm
If only we could invest in load shedding.  :TU:
Title: Re: Anyone here invest offshore?
Post by: conradl on August 06, 2015, 06:07:05 am

Thanks for the feedback!

I am a bit unsure on when it would be a good time to move ZAR->USD, but I guess some months it would be expensive & other a little less so. I am looking to possible move R10k pm ( its really depressing that 10k is only worth ~790$ currently ) but I might do it every second month rather to minimise the admin. Its a pity that we can't transfer money in electronically & then just convert whenever I feel like it...

Btw, how did you decide on the SCHD etf? I will definitely only be buying US etfs initially so I am not too worried about the USD/EUR exchange rates.

Cheers
J

This is an interview (http://www.moneyweb.co.za/investing/offshore-investing/the-offshore-etfs-with-dividend-yields/) with Simon Brown on two offshore dividend ETF's. I chose the SCHD one because it was cheaper at $38 per share vs $74 per share. I'm not sure about the HDV, but SCHD pays divi's every quarter. I did look at the holdings and both are invested in Blue chip companies.

Wrt the USD/ZAR exchange rate I can't really comment on, but I'm not seeing the Rand getting better with this political climate...
Title: Re: Anyone here invest offshore?
Post by: Orca on August 06, 2015, 08:47:30 pm
If you wish to invest in the Dollar then do so but keep in mind that the Dollar is at a high and should correct soon as it's gains have been overdone.
The normal depreciation of the ZAR is 2.5% pa according to MoneyWeb today.
Here is a 1 year chart of Euro/Zar that keeps me quite happy to live in Europe.

Title: Re: Anyone here invest offshore?
Post by: indexer on August 07, 2015, 08:21:52 am
I have been using Standard Bank WebTrader since Dec last year. The Vangaurd VGK (FTSE Europe ETF) and VTI (Total Stock Market ETF) are still cheaper (considering you plan on holding for the long term) than the various DB-X trackers available locally even after you include the 20USD trading fee and the WebTrader platform fees.

I use Exchange4Free to move money into my WebTrader account. (https://exchange4free.co.za/) They have always provided me with better spot rates than any of the banks IF you buy for at least R100k. (No swift fees of extra commissions.) If I was going to move and invest amounts smaller than R100k I would rather just use a DBX tracker due to the bank changes you are going to incur.

Remember to register with GlobeTax to get the 15% div treaty rate. The registration is valid for 3 years but will cost you about R300 plus couriers fees to send the original signed document to New York.

The service from Standard Bank has been fantastic, you can email Sandesh at WebTrader and get almost immediate responses on questions.



Title: Re: Anyone here invest offshore?
Post by: JohnnyH on August 11, 2015, 07:50:05 pm
I don't want to burst your bubble now but have you people thought this through? Has the $ gained in strength against all major currencies? If so, then the ZAR is not weakening as much as it looks on paper and will correct back down again. It might just be at the peak now and you will be buying the $ at a high.

When I last looked, the ZAR was depreciating at -3% pa and this is insignificant when you take into consideration that SA market as an emerging market by far outperforms developed markets.

Perhaps your view is politically motivated but SA has a very strict and solid financial system in place to the extent that the UK and USA sent representatives to study SA's SARS and SARB system after the 2008 fiasco.

You might have forgotten the 2008 bank implosion that never affected SA banks due to the strict regulations FSB has in place.

I could quite easily withdraw all my money with a simple email but I see SA as a more lucrative market to be in.

You make some very good points, thanks Orca.

My idea for investing offshore however is really just to diversify and to build up some assets in another currency.
Your comment on the EUR vs ZAR is also very interesting, it does seem a bit more "stable" or progressive than the USD.

The US stock market has been doing fairly well though vs the European markets, so I though that even if the Rand does strengthen markedly, the US investment should still grow at a fair pace.
Title: Re: Anyone here invest offshore?
Post by: Orca on August 11, 2015, 09:46:34 pm
The US is a developed market that under-performs emerging markets. Much like "how high can a high go when it is already in a high".
The $ is at a high and this could be detrimental in investing in the US at this stage. The market has had a surge since 2008 and is overpriced even now after a flat year. What if the $ and the market corrects? This will amplify your loss.

The EU is SA's biggest trading partner and the ZAR is pegged to the Euro. If you really have to move money out at this stage, then rather go for Euro stocks. I will in the mean time stay with growth stocks in SA.

The political factor might be your reasoning but corruption is rife even here in Europe. They may not throw chairs in parliament as in Japan but the sessions are a circus not unlike SA.

This is by no means advice but just my view so make your own choice.
Title: Re: Anyone here invest offshore?
Post by: gcr on August 11, 2015, 11:39:49 pm
Orca - a question for you.
I have an opening account form with a broker firm in London (my local brokers have recommended them for my overseas portfolio)
They have given me options of opening the account and having the portfolio reported in either Sterling; US Dollar or Euro. I want to buy shares on the Euro markets but also on the London exchange.
Can one buy shares in a company (as an example) Tesco's in Euros across the London Exchange or can one only buy them in pounds
I would prefer to have a single portfolio currency for the portfolio and don't necessarily want to open more than one account per currency as that becomes messy when reconciling holdings and values
Any pointers would be appreciated   
Title: Re: Anyone here invest offshore?
Post by: Orca on August 12, 2015, 10:24:18 am
A very interesting question and I too would like clarity on it.
I strongly doubt it unless the stock is dual listed in the UK and Germany but then you would require a broker in Germany as well.
The UK not being a full EU member state is still a bit obscure to me so I would recommend contacting your London broker.