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Blue Chip Journal - March 2019 edition

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ON THE MONEY Improved

ON THE MONEY Improved market opportunities Promising investment prospects, despite risks Gradual improvement in South Africa’s public sector prospects, which could drive an uptick in economic growth in the years to come, has led Old Mutual Investment Group to steadily reduce the exposure of its actively managed balanced fund offering to global markets such as the US, and increase allocations to South African asset classes. According to Graham Tucker, Manager of the Old Mutual Balanced Fund, while growth in the US is still good, it is going to be increasingly challenging to maintain the current level of growth. Tucker believes that South Africa is currently in a better position compared to last year this time and is making incremental progress. Therefore, combined with attractive valuations in select areas, he is seeing increased opportunities. Old Mutual Investment Group does, however, acknowledge that there are risks facing South Africa, not least of which is Moody’s, the last of the three ratings agencies to still assign an investment grade to the country’s debt, which is scheduled to announce its rating decision at the end of March. Moody’s said on 21 February, a day after Finance Minister Tito Mboweni delivered his 2019 budget speech, that it did not believe the decision to increase the expenditure ceiling by R16 billion over three years would weaken the credibility of South Africa’s fiscal policy. Keeping up with change LexisNexis handbook is a must-have The 2019 edition of the SA Financial Planning Handbook is a musthave reference for any financial planner. There have been numerous regulatory changes since the 2018 edition was published (in particular those made by the Financial Sector Regulation Act and the Taxation Laws Amendments Acts of 2018). Keeping up with these changes has become increasingly onerous for financial planners. This handbook has been updated to end December 2018 and provides expert insight into the changes as well as providing relevant case law and examples which allow the planner to apply the information in a practical context. Compiled by a team of experts, this handbook covers all aspects of financial planning and is recognised as the official textbook for postgraduate qualifications in financial planning. For more information visit: store.lexisnexis.co.za Brace yourself Expat tax is coming to South Africa An amendment to the South African Income Tax Act, which will have hard-hitting consequences for South Africans working outside South Africa, will come into force in March 2020. South Africans earning an income abroad should be considering their options. Up until now, South Africans working abroad for more than 183 days (of which 60 days are consecutive) were able to earn income free of South African tax. Since the enactment of this amendment, South Africans are now required to pay tax in SA of up to 45% of their foreign employment income once it exceeds ZAR1-million (approximately US 000) per annum. Although this threshold may seem reasonable, employment income for this purpose includes allowances and fringe benefits like the provision of housing, security and flights, among other things. It is also likely that pension contributions will be included in the threshold. (Sovereign Trust SA)

MAKE THE RIGHT CHOICE IN EMERGING MARKETS Build wealth by investing in emerging and frontier market based companies that are identified as being undervalued and offer potential for above average share price appreciation. Neal Smith Portfolio Manager of the Denker Global Emerging Markets Fund DISCOVERING OPPORTUNITIES BUILDING WEALTH +27 (0) 21 950 2603 service@denkercapital.com www.denkercapital.com Sanlam Collective Investments (RF) (Pty) Ltd is a registered and approved Manager in terms of the Collective Investment Schemes Control Act 45 of 2002 (CISCA). A schedule of fees can be obtained from the Manager. Maximum fund charges include (incl. VAT): Advice initial fee (max.): 3.45%; Manager initial fee (max.): 0.00; Advice annual fee (max.): 1.15%; Manager annual fee (max.): 1.55%; Total Expense Ratio (TER): 1.74%. The fund may from time to time invest in foreign countries and therefore it may have risks regarding liquidity, the repatriation of funds, political and macroeconomic situations, foreign exchange, tax, settlement, and the availability of information.

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