Interested in investing offshore?

DISCLAIMER

The information contained in this document does not constitute advice by Liberty. Any legal, technical or product information contained in this document is subject to change from time to time. If there are any discrepancies between this document and the contractual terms and conditions, or where applicable, any fund rules, the contractual terms and conditions, or where applicable, the fund rules will prevail. Past performance cannot be relied on as an indication of future performance. Investment performance will depend on the growth in the underlying assets, which will be influenced by prevailing market conditions. Any recommendations made by an adviser or broker must take into consideration your specific needs and unique circumstances.

Liberty Offshore Investment Plan is underwritten by Liberty Grp Ltd (Jersey Branch). Liberty Group Ltd is a licensed Insurer and an Authorised Financial Services Provider (no. 2409). Terms and Conditions apply.

For more details about benefits, definitions, guarantees, fees, tax, limitations, charges, premiums/ contributions or other conditions and associated risks, please speak to a Liberty Financial Adviser or your Broker.

THIS ARTICLE IS BROUGHT TO YOU BY ENVESTPRO.

www.envestpro.co.za

DURING THESE TRAUMATIC TIMES WITH THE VOLATILITY OF MARKETS AND ECONOMIES QUESTIONS HAVE BEEN ASKED PERTAINING TO OFFSHORE INVESTMENTS. CAN WE STILL DO IT, IS IT STILL POSSIBLE?

It is, however, possible to invest in overseas companies while still keeping your money in the country. This in itself has some advantages in terms of liquidity and simplicity. There is growing interest in offshore investments from many local investors searching for more diversified returns from the interconnectedness of the global investment landscape. The ease at which global markets are now able to transact among themselves has made offshore investing more accessible than ever. The local investment environment is seen in some cases as being at the mercy of corruption, as well as political and economic uncertainty. This has shifted the mindset of investors who are always looking for new opportunities, not to mention stability for their funds. “Investing offshore allows local investors to benefit from the profits generated by some of the top global companies like Apple and Facebook in the US, and SAP and Airbus in Europe. It also protects against currency fluctuations, should the investor decide to take their money offshore,” says Henk Appelo, Liberty Investment Product Developer. “It is, however, possible to invest in overseas companies while still keeping your money in the country. This in itself has some advantages in terms of liquidity and simplicity,” he adds. Opportunities for growth In addition to the higher returns being generated by some international economies, rapidly growing offshore companies

With Liberty’s Offshore Investment Plan,

for example, you can invest in offshore index trackers, which include equity, bond and cash trackers. The cash index trackers are offered in various currencies. Investing in tracker portfolios gives you the ability to access different asset classes at a low cost. Also, you can choose to have a fund manager grow your money by making the investment decisions for you.

“THE COMMITMENT TO ENGAGE

BUSINESS ADVICES

and funds can offer better growth prospects in the long term. Liberty offers a variety of portfolios, ranging from tracker funds to actively managed funds, through STANLIB and their offshore partners. Access to market-leading managers like Brandywine Capital and Columbia Threadneedle Asset Management is an opportunity for local clients. “The commitment to engage top global fund managers with solid track records is key to getting the best out of overseas investment opportunities for South African investors. Ultimately, the intention is to provide clients with both active and passive solutions to more appropriately complement or enhance their existing investment portfolios,” says Appelo.

IMPACT

It is important to consider the legalities of tax in relation to offshore investing. For example, with our Offshore Investment Plan being an endowment, the returns will be subject to income tax at a current rate of 30%, and an effective capital gains tax rate of 12%.

Foreign dividends will be subject to withholding taxes at different rates and local dividends will be subject to dividends withholding tax at 20%. The proceeds from this investment will generally be regarded as capital in nature and exempt in your hands as an investor.

The preferential tax rates applicable to this particular plan will work to the advantage of any earner in a higher tax bracket. Also, investors will not be adversely taxed on currency fluctuations. This all allows your funds to have more opportunity for growth.

“The legalities of investing offshore are complex and depend on the individual investor’s taste for risk and how they view the opportunities being offered in the long term.

“Investments in the Liberty Offshore Investment Plan are a lot less complicated because they still fall under the South African legal jurisdiction. This means that, should you as the investor and policyholder pass away, your loved ones don’t have to comply with any potentially complicated or costly foreign legal requirements,” Appelo says.

NEWS

CHEAPER AND FASTER DELIVERIES NOW POSSIBLE

WAREHOUSING HUBS ARE ENABLING RETAILERS, ECOMMERCE AND HEALTHCARE PROVIDERS TO PROVIDE CHEAPER AND FASTER DELIVERIES. FORWARD-THINKING SMART LOGISTICS TECHNOLOGY PROVIDER PICUP HAS PARTNERED WITH STOR-AGE PROPERTY REIT LIMITED TO PROVIDE DECENTRALISED HUBS IN CITY CENTRES AROUND THE COUNTRY, ALLOWING CUSTOMERS TO GAIN EASIER ACCESS TO LAST-MILE DISTRIBUTION.

Instead of using their own outlying warehouses to store goods to be couriered to customers on order, Picup is now providing decentralised hubs. There are currently 4 across the country through the Stor-Age REIT Limited partnership with many more in the pipeline.

Couriers may not immediately spring to mind as being enablers of the shared economy – the act of sharing goods or services with others in order to save on costs, carbon emissions and -thinking smart logistics technology provider Picup has done.

They act as consolidation points for the Picup network to deliver to the end user within a radius of between 10 and 20 kilometres. This versus dispatching them from large depots outside of the city which takes time, sometimes days, and incurs high monthly rental fees.

“Through the Hubs concept we are creating shared space for our customers where they only use what they need, when they need it. A parcel comes into a Hub from a store or warehouse, and won’t stay on the floor for longer than two hours,” says Antonio Bruni, CEO of Picup. Given lengthy delivery speed times and the high cost of shipping are two of the key reasons why consumers don’t complete a sale online, Hubs speeds up the former and reduces the latter. With an increasing demand from customers to get their goods as soon as possible, at the lowest cost, the Hubs concept improves the shopping experience for the end customer. Bruni says at the end of the day, the consumer wants their parcel delivered as quickly as possible, and Hubs allows this to happen through same-day delivery. “As ecommerce purchasing becomes ever more prevalent and consumers become more demanding when it comes to shipping, this has to change, especially when there is so much more competition in the market thanks to the pandemic.”

“There is a constant flow of parcels coming in and out of our space; we don’t sit on parcels, they go out as quickly as they come in,” he adds.

“Our customers want more efficient and cost-effective service providers while their customers want faster delivery times,” he says. Besides using the space optimally, what makes the delivery process so fast is that Gig Economy “ more efficient, cost-effective legends (riders) are located within the Hubs areas, ready to collect as soon as they get an alert via smartphone. Picup has 2500 service legends on motorbike, in a providers car or van who are connected to the and Picup system that alerts them when a faster delivery parcel has arrived in a Hub and needs to go out. The end-customer can also see where their parcel is in real-time by connecting to the Picup App. This makes the entire experience tech-based and userconnected. Stor-Age spokesperson Chris Oosthuizen says the impact of COVID-19 has completely reshaped the online retail space, with a significant increase in the volume and demand of last mile delivery. “Our national footprint of over 55 stores provides the perfect property overlay to give last mile delivery partners such as Picup the perfect springboard to vastly improve on their logistics strategy.” Bruni also has aspirations to enter the electric vehicle space and is currently piloting a proof-of-concept idea in Cape Town, scaling it over time through learning and trial and error. This as both Picup and Stor-Age REIT Limited intend to cut carbon emissions as far as possible from their fleets, and the fastest way is by upgrading some of their bikes and erecting charging stations that are solar-powered.

“We want to play our role in the green economy and have an electric vehicle footprint up and running once the concept is proven, where we can morph our current fleet gradually over time to our Hubs, where it’s viable,” Bruni explains. When it comes to the future of Picup’s Hubs, Bruni says that the concept has been underway for five years and is starting to scale as the technology to using the Hubs is being positively adopted by customers.

“The tech that drives the consolidation, optimisation, collection and delivery of parcels through the Hubs is what literally drives everything. We have come to intimately understand the last-mile and how it is connected to our customers’ distribution experience for their end-user and intend to rapidly grow our footprint in this space,” he concludes.

BY ANTONIO BRUNI, PICUP CEO