As Shakespeare put it, the “world is your oyster” and for retirees seeking greater global diversification, ETFSA has today announced the launch of a 100% offshore investment portfolio available for its Living Annuity clients.
The new strategy is 100% allocated to offshore assets, either purchased directly on foreign markets or through “inward investment” ETFs, listed on the JSE. The portfolio naturally has very strong “rand hedge” qualities. The use case varies between those retirees who may have hard currency liabilities but also for local investors simply seeking greater exposure to offshore markets. In certain cases, the living annuity market in SA has been constrained by the offshore allowances of some providers, whilst in this case the solution has adequate capacity to allow investors a complete offshore offering.
The Wealth Oyster has the following strategic asset allocation:
The asset allocation strategy is based on a formulaic allocation to various asset classes. This will limit portfolio churn and will focus on the longer-term return expectation from these asset classes. The tolerance limits will allow a degree of shift amongst the asset classes, if required, by macro economic events or through secular market changes.
ETFSA, as one of the most experienced users of ETFs in portfolio construction, has found that this formula driven approach works well for long-term investors including retirees.
The Wealth Oyster portfolio has a strategic asset allocation of 75% growth assets and 25% defensive assets. ETFSA delivers the investment strategy by holding ETFs benchmarking major global indices, including S&P 500, Eurostoxx50, Nasdaq, MSCI World and Bond indices. The portfolio also has a small allocation to global themes such as healthcare and global property.
Mike Brown, Managing Director, ETFSA, “We have identified limited competitive products within the living annuity space which provides complete exposure to offshore markets. A 100% offshore living annuity solution is appropriate for those with a low drawdown rate and to complement more balanced strategies.”
Nerina Visser, ETF Strategist at ETFSA, “The solution further broadens our comprehensive range of post‑retirement portfolios that leverage the power and flexibility of ETFs. The strategic weighting of approximately 25% to defensive assets and 75% risk assets, aligns with many large global multi-asset funds managed by South African managers within our market but in this instance, we deliver the strategy through low-cost ETFs.”
Whilst this is a new portfolio, and therefore has no performance history, the portfolio to be used from the launch has a back-tested performance of 14% per annum over the 5 years to end-June 2024. This represents the strength of many offshore markets over this time. The portfolio is weighted 64% to the US markets with the balance spread over other developed and emerging markets, which reduces our exposure to headline US indices.
The comparison between the Wealth Oyster portfolio and the composite benchmark over the past 5 years, shows a good record of delivering the returns of a representative composite global benchmark.
The new portfolio is offered to all members of the ETFSA Living Annuity, which is underwritten by 27four Life. The portfolio is also open to independent financial advisers.
For queries or more information on this new portfolio, please contact:
Gareth Stobie, Director, ETFSA
Email: gareths@etfsa.co.za
Cell: 083-626 2268 Tel: 010446 7893
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ABOUT ETFSA:
ETFSA is a dedicated provider of financial services and products, utilising purely exchange traded products in the investment solutions it offers. These include managed bespoke investment portfolios for high-net-worth clients, both in South Africa and abroad, as well as offering low-cost retirement annuity, living annuity and other retirement products. Its Investor Hub is a state-of-the-art digital platform, giving access to all 200 plus JSE listed ETPs, for both discretionary and tax-free investment accounts.
The database service offered on the etfSA website, www.etfsa.co.za, chronicles the entire statistical history of the ETP industry, since it started in South Africa in 2000. This database is extensively used by investment professionals, retail investors and academics as the prime source of information on the South African ETP industry.
ETFSA is a registered FSP, with both CAT 1 and 2 licenses.
Disclaimer
The Exchange Traded Products (ETPs) contained herein are mainly Collective Investment Schemes in Securities (CIS) and other listed securities which are generally medium to long-term investments that contain elements of risk and can be affected by market values, interest rates, exchange rates, volatility, dividend yields and issuer credit ratings. ETPs are listed on the Johannesburg, or other Stock Exchanges, and trade at ruling prices on such Exchanges.
The price of ETPs can go up as well as down and past performance is not necessarily a guide to the future. The ETP’s herein are listed on the Johannesburg Stock Exchange Limited and trading in ETP securities will incur trading and settlement costs. ETF securities are traded at ruling prices and can engage in scrip lending.
The information and opinions provided herein are of a general nature and do not constitute investment advice. Whilst every care has been taken, no representation, warranty or undertaking, expressed or implied, is given as to the accuracy or completeness thereof.
The ETFSA Portfolio Management Company (Pty) Ltd (FSP No 52314) provides asset management as well as financial intermediary and advice services. It uses Exchange Traded Products to construct portfolios for use in Retirement Annuity, Tax-Free and Discretionary investments. It holds Professional Indemnity insurance and Fidelity Guarantee insurance as required by FAIS. etfSA.co.za is managed by M F Brown, who is a registered financial services provider (FSP No. 39217). M F Brown has Professional Indemnity Insurance as required by FAIS. All opinions and information on this report may be changed at any time without notice. Redistribution, reproduction, the resale or transmission to any third party of the contents of this report, whether by email, newsletter, internet or website, is only possible with the written permission of ETFSA. etfSA.co.za, its sponsors, administrators, contributors and product providers disclaim any liability for any loss, damage, or expense that might occur from the use of or reliance on the data and services provided through this website. etfSA.co.za® and ETFSA The Home of Exchange Traded Funds® are registered trademarks in the Republic of South Africa.
