News April 2013
Possibly the last opportunity
to diversify
Many clients who are invested in Pension,
Retirement Annuities and Preservation Funds are over weighted in that major
asset class of equities and cannot rebalance their portfolios in order to be
properly diversified into the three major asset classes, namely South African
Equities, South African Alternative Funds (Hedge Fund of Funds) and Offshore
Fund of Funds, as the Pension Fund Act does not allow that type of
diversification.
Clients who are in preservation funds and who
are over weighted in the main asset class of Equities, still have the
opportunity to do a total or partial once off surrender in order to enable them
to diversify properly. There will be tax implications, but we have calculated
that even taking tax into account the client will most likely be better off
within the next ten years if he diversified the surrendered amount to a quality
South African Hedge Fund of fund, or Offshore Fund of fund. When you start to
draw pension for an income from these funds you will be even better of as this
income will in most cases, as the tax act stands now, be tax free, where as the
income from a pension fund is fully taxable.
The opportunity to cash in preservation funds
are only available until age 65 or until legislation prohibits it, which might
come sooner than later. Clients who would like to diversify should contact us
or their private brokers, as soon as possible for the necessary assistance.
Small Top-Ups into KFHF
allowed
The minimum amount one is allowed to invest
into Kanaan Fund of Hedge Funds (KFHF) is R100 000 and an existing KFHF
client is allowed to make contributions to their investments, as small as
R10 000, which we encourage clients to do, as there is a possibility that
new legislation will make the minimum R1 million, as previously mentioned.
Kanaan Trust
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