YOUR MONEY: Can I profit from both local bond yields and offshore exposure?

Is there an investment strategy I can use to benefit from both elevated local bond yields and offshore exposure?Long-dated South African bonds are currently delivering a “clean yield” of more than 10% — even if you opt for a blend of different maturities. Markets are tough at present and I expect interest rates to remain higher next year.

At the same time, with interest rates elevated and growth slower, I think it will be hard to see a repeat of the returns we earned in global equity markets over the past decade. Still, there will be a lot of opportunities in growth and technology stocks, underpinned by US legislation to invest more than $1.5-trillion in infrastructure, semiconductors, science and green energy.

Let’s assume you have about R4m to invest. I’d propose putting between 30% and 40% in long-dated South African bonds with yields above 10% per year. The interest payments on these bonds can be used to supplement your income, depending on your financial needs. Understand, interest on the bonds is fully taxable. Still, even after paying tax the returns are attractive.

The balance of the investment can be invested offshore in stocks that offer solid opportunities. This way, you have a chunk of your portfolio growing healthily in equities while also earning income from the bond investments. The reason I recommend offshore is that historically, global equities have far outperformed the domestic market when converted to a common currency.

But, as always, the allocation between bonds and offshore funds depends on your personal appetite for risk.

South Africa Latest News, South Africa Headlines

Similar News:You can also read news stories similar to this one that we have collected from other news sources.

Dr Malinga denies rumours that he used his donation money to buy a McLaren🗣'Even if I had the money, I wouldn't buy that car now.' → Dr Malinga has responded to rumours that he used the money he received as donations to buy a car worth millions. ECREntertainament Viral Trending
Source: ecr9495 - 🏆 38. / 51 Read more »

SASSA social grant beneficiaries can now withdraw their moneySASSA social grant beneficiaries can now withdraw their money following system glitch A number of SASSA social grant beneficiaries who use the gold card users could not access their money on the payment day.
Source: TheSAnews - 🏆 25. / 59 Read more »

BROKERS’ NOTES: Buy Naspers, sell ThungelaWillem Oldewage of Nitrogen Fund Managers on what the smart money is doing.
Source: FinancialMail - 🏆 20. / 63 Read more »

YOUR MONEY: Can I profit from both local bond yields and offshore exposure?Here’s how to tailor your portfolio to get the best of both worlds.
Source: FinancialMail - 🏆 20. / 63 Read more »

$8.5bn from rich countries: SA to spend most of the money on electricity infrastructure | Fin24South Africa’s government will invest the bulk of an $8.5 billion (R152 billion) climate-finance deal being offered by wealthy nations on bolstering its energy supply. | News24_Business _Business We don't need this loan. This will be an albatross around our neck for generations to come _Business Our hard earned tax money should be doing something to make things in our lives better like adding more kw to the grid so load shedding is ruled out,potholes filled up to make roads smoother something _Business These are the monies you find under the mattress in 4 - 5 years time at government officials homes
Source: News24 - 🏆 4. / 80 Read more »