Why the Ashburton Global Leaders ZAR Equity Feeder Fund is popular with SA investors seeking offshore investments

As economic worries persist and after years of a sluggish JSE performance, many South African are looking for potentially better returns from top performing offshore investments and diversification into hard currency assets. 

But some are unable or prefer not to invest in offshore funds.

In response, Ashburton Investments has made investing in leading markets hassle free through feeder funds, such as the Ashburton Global Leaders ZAR Equity Feeder Fund, which is proving extremely popular with investors. 

Through the fund, South Africans can access offshore investments without having to utilise their offshore allowance. And it can also be invested in through Tax Free Savings Accounts (TFSA). The fund has a minimum lumpsum investment of R5 000, or R500 by monthly debit order. 

What makes offshore investments attractive?

The Ashburton Global Leaders ZAR Equity Feeder Fund is the rand-based feeder of Ashburton’s highly successful Luxembourg-domiciled, US dollar-based Ashburton Global Leaders Equity Fund (the principal fund). 

Through this fund, South African investors can access a high quality, concentrated portfolio of up to 25 of the world’s most prominent international mega cap stocks such as Alphabet, Visa, Microsoft and Nestlé. These stocks have a global presence and are typical constituents of a major index such as the FTSE or the Dow Jones.

The fund invests in industry leading companies which are characterised by quality attributes such as improving cash return spreads, relatively high predictability of earnings and management and balance sheet criteria. 

Through the careful selection of market leading stocks in attractive industries, the principal fund aims to deliver sustainably compounding total returns over the long term.

Over the past 5 years, the principal fund has delivered around 7.0% annualised return in USD and 19.8% year-to-date in USD (October 2019). Considering the biggest sector exposures, the top three are Health care at 23%, Consumer Staples at 20%, followed by Information Technology at 14%.

While sector diversification within the portfolio is important, the fund also benefits from geographic diversification which is important for investing offshore as a South African. 

Of the major geographic holdings, the US makes up the largest portion at 50%, followed by Europe Ex UK at 26%, the UK at 19% and Asia Ex Japan at 3%. Although the underlying companies have exposure to many other markets.