Offshore investing 101

Offshore Investing is no longer optional, it is IMPERATIVE!

South Africa faces mounting challenges—corruption, loadshedding, high unemployment, political instability, and a weakening infrastructure.

These issues not only limit local growth opportunities but also pose serious risks to your long-term wealth.

One of the most powerful arguments for offshore investing is the depreciation of the rand. In 2005, the exchange rate was around R6 to the USD. Today, it’s nearly R19. That means if you had simply held your money in dollars, currency depreciation alone would have grown your capital by over 200%, before any investment returns.

Offshore investing gives you:

•  Protection against rand weakness

•  Access to stronger global markets

•  Exposure to world-class fund managers

•  Jurisdictional safety and tax efficiency

Direct or Indirect Offshore Investment?

Decide between direct offshore investing (in foreign currency) or indirect exposure (keeping your money local) via feeder funds—depending on what suits you best.

In some instances, like within a retirement or living annuity, one cannot truly invest offshore and using feeder funds is your only option.

True offshore investments are usually cheaper and can be structured in a far more tax efficient manner, and therefore usually preferable.

CHoosing a structure & A platform

So, you have decided on an offshore investment! 

This is where a meeting with Thrive will come in handy!

We will assess your situation, requirements and objectives and we will present you with a few possible solutions that best fit your needs. We will only look at safe and secure juristictions, like the Channel Islands, Cayman Island, Mauritius, etc.

Regarding your “structure”, this is essentially the vehicle that you would use to house your assets.

Familiar structures are discretionary trusts, international retirement plans, International preservation funds, offshore endowments, etc. Each comes with its own sets of costs and benefits, and depending on your situation and earlier mentioned objectives, we would present the options most suitable for you.

Using these structures correctly is essential in providing you with excellent tax efficiency, asset protection and succession planning.

Once we have decided on a structure, we will look at a platform that offers a wide range of funds, ETFs, hedge funds, alternatives, in order to have the best assets within your portfolio.

We always ensure maximum diversification within any given portfolio and will always hold for than FIVE different asset managers, ensuring currency, geography, asset class spread to further mitigate risk.

Setting it all up

Once you have chosen the most suitable structure and platform, we will assist you with the paperwork involved in setting yourself up.

We will gather important information regarding your beneficiaries and also setting up your letter of wishes, which will come into play upon your death.

We will then assist you with making the transfer across to your newly set up structure!

Selecting your funds

This is where things start to get a bit more exciting. The part where we construct your portfolio!

Taking things into account like appetite for risk, investment horizon, income needs, etc, we will put together a “fund selection” advice document, whereby we look at the best suited funds to make up your portfolio.

We follow the “core and satelite” approach.

Depending on your above mentioned parameters, the core will make up the stable, predictable portion of your portolio, I see the core as a tanker in war, moving slightly slower, but robust and virtually indestructible.

The satelites of your portfolio consist of around 4 to 6  funds, each with around 2.5% - 5% and no more than 10% of your portfolio. We break the satelite funds up into three categories

Low volatility equity

Consumer defensive equity, companies that will always service a need in the market regardless of a recession, a pandemic, a war, etc. For example, you are always going to brush your teeth, feed your dog, drink your beer, use your apple laptop or your samsung smartphone, use your chronic medication, use amazon to shop, your mastercard to pay and so on.

Medium volatility equity

Your medium volatility equity is seen as comnaies that are not quite a necessaity, and in times of recessions, pandemics, wars, are usually no longer used as heavily. Think luxury goods, travel, certain tech, etc.

High Volatility Equity

Think of companies that are challenging the status quo, changing the way our world works. Often times, seen as questionable and hard to envision. Think Tesla, Zoom, Nvidia, Airbnb, Uber, Crypto banks, etc. High returns, but also steep potential downsides.

If capital preservation and predictability top your list, we tilt toward low‑volatility names. Comfortable riding market waves for higher growth?

We increase exposure to medium and high‑volatility equity—always within a disciplined, diversified framework.

CONCLUSION

Investing offshore with Thrive  Wealth Management is really about turning uncertainty into opportunity.

When we look beyond South Africa’s borders, we aren’t abandoning home—we’re simply adding a second engine to the aircraft that carries your wealth.

Global markets offer exposure to industries and companies the JSE can’t, while holding part of your portfolio in hard currencies cushions you against the rand’s long, downward drift—roughly 200 percent over the past two decades.

I often begin with a simple question: “On a scale from 1  to  100, how much faith do you have in South Africa’s future?” A score of  1 imagines a Zimbabwe‑style collapse, while  100 conjures Singapore’s macro‑economic bliss.

Whatever number feels right to you can guide the percentage of assets that should remain in rand‑denominated investments. Choose  20, and it suggests keeping 20 percent local and externalising the other 80; pick  70, and your split might lean 70 percent to SA and 30 percent offshore. It’s an intuitive way to translate feelings into a balanced allocation.

To highlight why currency diversification matters, consider this: suppose you were to lock R20 million in a safe for the next twenty years. Knowing what the rand has already done historically — would you really leave the cash in rands, or would you convert it into dollars (or a basket of hard currencies) before closing the door?

Most people instinctively pick the latter, and that instinct is exactly what formal offshore investing achieves: protecting tomorrow’s buying power today.

To chat in more detail about offshore investments, where to begin or optimising what you already have,