Chapter 16Portfolio Models for South African and South American Expats

South African Investors

South Africans are quickly becoming some of the world's most educated investors. Years ago, they began recognizing the futility of actively managed products. As a result, the country's firms started offering an array of stock market indexes and exchange‐traded funds (ETFs).

Such offerings are a godsend to South African expats looking for offshore investment solutions. Saxo Capital Markets offers trading on the Johannesburg Stock Exchange. When I wrote this book's first edition, trading commissions were 0.25 percent of the invested total or 100 ZAR, whichever was higher.1 But as I mentioned in Chapter 9, international brokerages play silly games. They move fees up. They move fees down. “Come into our lair,” they seem to say after lowering fees. Then they jack their fees once a sufficient number of new investors have pushed into their doors.

These fee changes, of course, are irritating. But they're not going to make or break your portfolio. Instead, high ongoing fees—such as those charged by offshore pensions—are the culprits that might lead to a retirement spent in your brother's basement.

As I write this in June 2017, Saxo Capital Markets charges purchase commissions of 0.35 percent of the invested total or 250 ZAR, whichever is higher. This is the rate for trading on the Johannesburg Stock Exchange. Rates differ when using different stock exchanges.2

An iShares South African stock ...

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