REMOVING THE FOREIGN ASSET LIMIT FOR ENDOWMENT ACCOUNTS

REMOVING THE FOREIGN ASSET LIMIT FOR ENDOWMENT ACCOUNTS EFFECTIVE 12 DECEMBER 2018

We are pleased to inform you that we have removed the foreign asset limit for the Allan Gray Endowment, effective 12 December 2018.

Endowment accounts will be allowed up to 100% in foreign assets, up from 60% since April 2018
As Living Annuity and Endowment investors use Allan Gray Life’s foreign asset allowance instead of their own, we need to manage Allan Gray Life’s overall foreign asset exposure to ensure that we comply with the South African Reserve Bank’s exchange control regulations. Since 15 December 2017 we have applied foreign asset limits to our Living Annuity and Endowment accounts to remain compliant. These limits were last revised on 5 April 2018 to 60% in foreign assets (please see Practice Note 321).
The combined impact of the factors listed below has led to us having enough foreign asset capacity to remove the foreign asset limit for Endowment accounts:

  • The foreign asset limits that have been in place over the last year
  • The level of foreign investment inside the unit trusts we offer
  • The relative performance of foreign assets to local assets in rand terms

Living Annuity accounts will still be subject to the 60% foreign asset limit
While we have enough foreign asset capacity to remove the foreign asset limit for Endowment accounts, we are not yet in a position to relax the foreign asset limit for Living Annuities.

We continue to closely monitor and manage our foreign asset exposure
Our aim is to change our foreign asset limits when we believe the changes can be maintained for a reasonable period of time. If any of the variables change more rapidly than what we have assumed, we may be required to review these limits again in future.
We also continue to work on additional options to solve our foreign capacity constraints in the longer term.

If you have any questions or feedback, please contact your Business Development Manager, our Adviser Service Centre on
0860 000 653 or email us at ifa@allangray.co.za.

Or contact Ginsburg Financial Services for your investment and retirement questions.