Diversify Offshore with Structured Autocall Investments

Ruvan J Grobler • May 21, 2025

Structured Investments are pre-packaged investment strategies with predetermined payouts and can be linked to a variety of underlying assets (e.g., equities, indices, commodities, or currencies). Some structured products include downside protection, which can cushion losses in adverse market conditions. By diversifying into different protection levels and structures, you can tailor the risk exposure of your overall portfolio.

 

An autocall investment is a structured note that can end early if the linked index, like the Nikkei 225 or Euro Stoxx Select 30 Dividend Index, performs well enough. It runs for a fixed period of five years but is reviewed once a year. If the asset is at or above a certain level on a review date, the note "autocalls": it ends, you get your original money back, plus a set return. If it doesn’t autocall, it keeps going. At the end, if the asset hasn’t fallen too far, you still get your money back. But if it has dropped below a certain threshold, you could lose money based on how much it fell.

 

  • Who is this for?

Investors looking for offshore exposure with a level of capital protection. Minimum R100 000.

 

  • Credit risk:

Structured products are often issued by banks or financial institutions. Spreading investments across different issuers can reduce exposure to the credit risk of any one issuer. In this example Investec is the issuer, but the credit reference can be any of the following: Commerzbank AG, Credit Agricole, BNP Paribas SA.

 

  • Protection:

In this example, 100% capital protection in Rand provided the index does not end below 70% of Initial Index Level.

Examples (corresponding to numbers of the graph) assuming R100 000 is invested.

 

1) Pay out = R100 000 x (17.0% x 1) = R117 000

2) Pay out = R100 000 x (17.0% x 3) = R151 000

3) Pay out = R100 000 x (17.0% x 5) = R185 000

4) Pay out = R100 000 x 100% = R100 000 (Index down <30%)

5) Pay out = R100 000 x 65/100 = R65 000 (Index -35%)

 

A stock broking account is required for these investments; we can assist in setting up an account if needed. Dollar denominated investments are also available. Interested investors can reach out directly to me at ruvan@bovest.co.za for more information.

 

The above is factual information only and does not constitute financial advice.

 

Ruvan J Grobler RFP™ (PGDip Financial Planning)

How to invest in a volatile market

By Geo Botha • July 4, 2025
How to invest in a volatile market: 3 Principles to keep in mind ‘In the short term, markets can be very volatile depending on which news story makes headlines. However, over the longer-term investors are always rewarded for staying invested and riding out the waves.’ We know this by now, we have heard it many times before and historical data proves it. Yet it’s easier said than done. When it gets to our own money we are emotionally involved and there is a part of us that believes that this time, it might indeed be different. What if the markets never recover and I suffer permanent capital loss. And with the increase power of AI and social media, it feels like my portfolio hangs on the thread of a single Tweet. In this article Stephen Bernard, an actuarial analyst form our partner Allan Gray share his views, backed by statistics and historical evidence: Read the article here: https://www.allangray.co.za/latest-insights/markets-and-economy/how-to-invest-in-a-volatile-market/

Invest Globally, Prosper Locally: Offshore Strategies for SA Investors

By Ruvan J Grobler • July 1, 2025
In an increasingly interconnected global economy, South African investors are finding compelling reasons to look beyond local borders when building long-term wealth. Offshore investing offers access to broader, more resilient markets, particularly in developed economies with stronger currencies and more stable political environments. Given South Africa’s constrained economic growth, fiscal uncertainty, and the rand’s vulnerability as an emerging market currency, allocating a portion of your portfolio offshore can serve as both a growth engine and a hedge. Investing offshore provides exposure to world-leading companies, industries, and fund managers that are often unavailable in the local market. It allows investors to participate in innovation-led growth in sectors like technology, healthcare, and clean energy, which are typically underrepresented on the JSE. Most importantly, it supports diversification—not just across asset classes, but across geographies, currencies, and economic cycles—reducing concentration risk tied to the South African economy. Key Reasons to Invest Offshore: Diversification: Reduce reliance on South African markets and benefit from a broader global opportunity set. Currency Hedge: Protect your wealth against rand depreciation by investing in hard currencies. Global Access: Gain exposure to top-tier international asset managers and world-class investments. Growth Potential: Participate in faster-growing economies and industries driving global expansion. Important Considerations for South African Tax Residents Before investing offshore, it’s essential to evaluate how your investment aligns with your broader financial planning, particularly around access, succession, taxation, and estate planning: Flexibility: Will you have access to your funds when needed? What types of investments can you hold? Succession Planning: Can your investment be transferred to your heirs? Will Capital Gains Tax (CGT) apply? Tax Compliance: Is the structure tax-efficient, and what must be declared on your tax return? Estate Structuring: Will your investment attract foreign estate duties? Is an offshore executor required? An Efficient Offshore Solution: The Offshore Wrapper A tailored offshore wrapper can simplify many of these complexities, offering a cost-effective and administratively streamlined solution. Key benefits include: No exposure to offshore estate duties No South African executor fees on death No inheritance tax in the offshore jurisdiction Ability to nominate beneficiaries directly for smooth succession Creditor protection for assets held within the structure Consolidation of various investments (e.g., share portfolios, funds) under one structure Minimum investment from $25,000 Tax Treatment The offshore wrapper also provides significant tax efficiency: Taxes are calculated and settled annually by the platform—no action required by the investor CGT is capped at 12%, and income tax at 30% Taxes are applied to USD returns, meaning rand depreciation is not taxed Reach out to me at ruvan@bovest.co.za for more information. Ruvan J Grobler RFP™ (PGDip Financial Planning)