New online offering gives access to global markets

The service is offered via Sanlam Private Investments UK in London, SPI Direct and gives investors the chance to trade in spreads and contracts for difference (CFDs) on indices, foreign exchange, commodities, individual shares and bonds.

Gerhard Lampen, head of iTrade, says the time is ripe for South Africans to diversify their investments offshore. "While the global picture is likely to remain rocky this year, there are definitely some interesting prospects for investors. In my view, the US is the safest place to invest right now. While growth is low, this region is recovering much faster than the UK and offers very good possibilities. Emerging markets still have the potential for strong growth, but they remain a very risky prospect indeed."

Rand hedging

He added that US stocks are strong rand hedges. "Rand hedging will be key for South African investors if, for instance, the US proceeds with tapering. While local investors often believe that stocks such as Anglo American and Billiton provide enough of a rand hedge, the truth is that they are still quite exposed to emerging market sell-offs."

He said amendments to tax structures have made it far easier to move money offshore. "South Africans are now able to invest up to R1m of their travel allowance overseas and this can be done very simply at a bank - rather than having to go through Reserve Bank approval. After that we can take up to another R4m offshore but this needs Reserve Bank approval."

Lampen explained that CFDs are a type of derivative instrument that allow investors to short and gear shares. CFDs are the preferred instrument for traders because trading costs are much lower than direct equities.