Prescribed Minimum benefit is a set of defined benefits to ensure that all medical scheme members have access to certain minimum health services, regardless of the plan they have selected. The aim is to provide with continuous care to improve their health and well-being and to make healthcare more affordable. PMB’s are feature of Medical Schemes act, in terms of which medical aid schemes have to cover the costs related to the diagnosis, treatment and care of • Any emergency medical condition • A limited set of 270 medical conditions ( defined in the Diagnosis treatment pairs) • 25 chronic conditions ( Defined in the Chronic Disease list) Did you know as a medical scheme member, you have cover for over 26 PMBs Already, you can find out more about these PMBs by • Visiting the council for Medical Schemes PMB page for a definition of an emergency medical condition • Access the Council What are emergency conditions? An emergency medical condition means the sudden and, at the time, unexpected onset of a health condition that requires immediate medical treatment and/or surgery. If the treatment is not available, the emergency could result in weakened bodily functions, serious and lasting damage to organs, limbs or other body parts or even death. In an emergency it is not always possible to diagnose the condition before admitting the patient for treatment. However, if doctors suspect that the patient suffers from a condition that is covered by Prescribed Minimum Benefits, the medical scheme has to approve treatment. Schemes may request that the diagnosis be confirmed with supporting evidence within a reasonable period of time. Is pregnancy a PMB condition? When you fall pregnant, your pre-existing PMB conditions remain covered in full, as well as any PMB condition that you may develop during pregnancy, however you need to be covered by the medical aid or coming from another medical aid with no break of more than 90days. To see if your condition qualifies for PMB cover please contact Namhla in our Health Department email [email protected] , tel (011)658 -1333 Source: Namhla Zwane
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![]() Discovery will pay your children's education fees when you can't. The Global Education Protector from Discovery helps to cover your children's education from crèche through to tertiary education, locally or abroad, if something happens to you. Cover your child's tertiary education fees by leading a healthy lifestyle If you don't claim and lead a healthy lifestyle with Vitality, you can get up to 100% of your child's tertiary fees funded. The percentage is based on your children's age when you take out the policy and the benefit option you select. Reasons to consider Discovery's Global Education Protector A good education is one of the best gifts you can ever give your children. With Discovery's Global Education Protector Benefit, the education cover will ensure that they'll always be provided for and that their future is bright. All benefit options automatically include cover for:
To get a quote for your Global Education Protection , contact Kevin and Ray in our Life department, email [email protected] , tel (011)658-1333
Source: Discovery You may have heard of a return on an investment, but have you heard of an investment measure called the internal rate of return (IRR)?
The return on investment (ROI) – sometimes called the rate of return (ROR) – is the percentage by which an investment has increased or decreased over a certain period. By contrast, the IRR measures the actual return on an investor’s money in a portfolio. The IRR calculation takes into account all fees, the investment term, and additional investments and withdrawals, and calculates the growth of the investment in a meaningful way. This enables investors to determine whether their portfolio is on track to achieve the return they need to maintain their standard of living. The IRR calculation shows a portfolio’s return on an annualised (per year) basis. If, for example, you had R100 on January 1 and R110 on December 31, and you made no deposits or withdrawals between those two dates, your IRR would be 10% for the period. If, however, you made monthly deposits of R1 (or R12 in total) and your portfolio was worth R110 on December 31, you would have a negative IRR of –1.9%. After investing a total of R112, you would have less money (R110) than you invested. If, on the other hand, you withdrew R1 every month and you had R110 at the end of the year, your IRR would be 23.2%. Your cash flow during the year would have been R12, and you would have ended the year with an additional R10 in the investment. The IRR calculation is also referred to as the money-weighted return calculation. This is different from a traditional time-weighted return where we exclude any client-generated cash flow in and out of the portfolio and look only at the initial value (R100) and the final value (R110) and get a return of 10%, which ignores how much money had been added or withdrawn over the period. Although these are very simple examples, they illustrate the importance of knowing a portfolio’s IRR. In reality, additional variables, such as fees, are taken into account, thereby providing a more realistic picture of your return. Knowing your portfolio’s IRR is important, because it enables you to monitor whether you are progressing towards achieving your financial goals. It indicates the actual return, including cash flows in and out of your portfolio, over the period. By comparing the IRR to your required rate of return – the rate that your portfolio needs to achieve in order to meet your lifestyle requirements, for example, inflation plus 2% – you will be able to assess your progress towards your goal. Interestingly, two people may be invested in the same portfolio but have a different IRR, because their deposit and withdrawal patterns are different. Let’s say, for example, that the market increases 10% over the year, but it first goes through a valley, falling 5% in the middle of the year. If Investor A added to her portfolio while the market was in the valley, whereas Investor B made a withdrawal, it means that Investor A bought at a discount, while Investor B realised a loss. In this example the portfolios’ overall performance was the same, but their individual IRRs will be different. If, during a financial planning exercise, calculations show that you need an annual return of 3% above inflation to achieve your lifestyle objectives, the calculation assumes that, as long as the money is invested in your portfolio, it is earning 3% above inflation. The IRR calculation is the most appropriate formula for checking whether you are actually earning what your financial plan says you need. To get advise on investment options with a track record of good returns, please contact Kevin or Ray, email: invest@daberistic.com tel no: (011 658-1333) Source: Business day live Offshore investing should be part of any long-term financial plan, especially if you are keen to leave the country before or after retirement or want your children to study abroad.
Explaining offshore investments Offshore investments are any investments housed in a country other than the investor’s country of residence. This could be in developed or emerging countries such as China, India, Brazil, Russia or Turkey. The key to offshore investing is to not only invest in a different country but also in different economies, markets and currencies, thereby diversifying your investment portfolio. Factors to consider before investing offshore The prospect of investing money outside of your country can be daunting, given the sheer size of the investment universe. As a new investor, you might feel uncomfortable with the idea of placing assets and investments in another country with foreign organisations. You also have to consider product and government rules, regulations and restrictions on purchasing offshore assets. With 50 different offshore centres, 126 different legal and tax systems, 27 000 different listed equities and an estimated 36 000 different unit trusts to choose from, where do you invest? The answer is simple. Stick with people and organisations you know and trust. Seek the advice of a locally- based, competent financial planner who has a sound track record of investing offshore. Whatever your reason for choosing to invest internationally, it is important to consider the following factors: Your objective or motivation for investing offshore • The time horizon or length of time for which you want to invest • The risk tolerance of your investment • If you want the funds to be invested offshore permanently • All relevant foreign exchange control regulations • Tax implications and banking charges associated with your offshore investment Limits to offshore investing South Africans in good standing with the Receiver are allowed to invest up to R10 million offshore each year (2015/2016 tax year), subject to tax clearance from the South African Reserve Bank. You are also allowed to invest R1 million annually, without tax clearance, by means of a single discretionary allowance. This allowance still needs to be registered with the Reserve Bank. How to invest offshore You can either invest into one of the foreign-denominated currencies, such as the dollar, euro or pound, or by an asset swap in rand-denominated locally available offshore unit trusts. The advantages of offshore unit trusts are much lower limits and fewer administrative requirements. Liquidation of these funds will also happen in rands as they are not invested offshore permanently. The simplest and most cost-effective way is to invest in foreign currency offshore unit trusts through an offshore platform which is operated locally by a registered and reputable provider. In addition, exchange-traded funds are also available. You can also invest in offshore share portfolios that are managed and reported on locally or in endowments. These funds will be expatriated permanently using your annual offshore allowance, or can be paid to you anywhere in the world, including South Africa. You can also consider opening an offshore bank account or investing in gold or certificates of deposit. Other options include using your bank account for online share trading through a brokerage or investing in property and more exotic investments using offshore trusts. The latter are usually more risky, and may consist of financial instruments such as sovereign and corporate debt, high-yield investment schemes and other investments which are outside of your domestic reach. Regulation of offshore investments Only funds that are approved by the South African regulator, the Financial Services Board (FSB), can be marketed in this country. Investing in FSB-registered funds reduces your investment risk, as these funds are subject to oversight by the local regulator. Advantages of investing offshore The South African financial market comprises only one percent of the global market. If you only invest locally, you deny yourself the opportunity to invest in those companies that have an international footprint and could generate substantial profits for investors across different economies and markets. By allocating a portion of your investments offshore, you could spread the risk, and enhance the possibility of generating better returns by diversifying. It also gives you access to sectors that you would not find on the JSE. It is important to keep in mind that you need to have a longer time frame for offshore investing because of the dual volatility of currencies and the markets. Another reason for investing offshore is to save tax in tax havens or lowtax jurisdictions. Offshore investments could be owned by an offshore trust for estate planning purposes. Your financial planner and fiduciary specialist can advise you on this. As mentioned earlier, investing offshore can also provide for children’s tertiary education at overseas universities, travelling extensively or wanting to retire overseas. Offshore investing offers a hedge for people who fear political or social unrest and is also a way to protect your investments against the depreciation of the rand. Risks of investing offshore
To set up an appointment with our Financial Planners, please contact Kevin, email: [email protected] tel no: (011 658-1333) Source: Old Mutual Apart from estate planning benefits, the latest budget changes further strengthen the tax benefits of the endowment, which is encouraging investors to revisit the case for this often overlooked product.
To build a successful long-term investment portfolio, one must consider ways to enhance their capital whilst finding efficient mechanisms to reduce your taxes. Endowments remain a useful investment vehicle and offer a disciplined way of saving where you are committed for a certain period so that you can reach your goals. The tax benefits of endowment policies Endowments offer an attractive tax-efficient option for people who want to save more than the maximum annual limit for tax-free savings accounts, and those who have exhausted their annual tax allowances such as tax-free interest income. The recent increase in the CGT inclusion rate means: an 18% effective tax rate on capital gains for individuals in the highest income tax bracket, and 36% for trusts, for an endowment policy, the effective CGT rate for these individuals and trusts is just 12%. In addition, tax on income is 30% for endowments as opposed to 45% when these individuals are taxed according to their marginal tax rates in other investment vehicles. This tax treatment is also beneficial for other income categories as well (i.e. for everyone with a marginal tax rate above 30%). In addition to tax savings, an endowment offers the following advantages: Simplified tax administration as tax is recovered within the endowment and taken care of on behalf of the investor. Insolvency protection – the entire value of the policy will be protected against creditors three years after inception until five years after the maturity, or termination of the policy. Beneficiary nomination can lead to potential savings on executor’s fees (up to 3.99% of fund value). Where a beneficiary has been nominated, payment of the death benefit does not depend on the winding up of the estate and beneficiaries will receive the proceeds relatively quickly. Liquidity is created in the estate as payment of the death benefit does not depend on the winding up of the estate and beneficiaries will receive the proceeds relatively quickly. Advantages of staying invested in an endowment, even after maturity
Source: Sanlam What is the fund’s objective? The Fund aims to create long-term wealth for investors within the constraints governing retirement funds. It aims to outperform the average return of similar funds without assuming any more risk. The Fund’s benchmark is the market value-weighted average return of funds in the South African – Multi Asset – High Equity category (excluding Allan Gray funds)
Fund description and summary of investment policy? The Fund invests in a mix of shares, bonds, property, commodities and cash. The Fund can invest a maximum of 30% offshore, with an additional 10% allowed for investments in Africa outside of South Africa. The Fund typically invests the bulk of its foreign allowance in a mix of funds managed by Orbis Investment Management Limited, our offshore investment partner. The maximum net equity exposure of the Fund is 75% and we may use exchange-traded derivative contracts on stock market indices to reduce net equity exposure from time to time. The Fund is managed to comply with the investment limits governing retirement funds. Returns are likely to be less volatile than those of an equity-only fund Suitable for those investors who:
For each percentage of two-year performance above or below the benchmark Allan Gray may add or deduct 0.1%, subject to the following limits:
Source: Allan Gray On Saturday 26 May 2018 Folpic Investors Forum, which is one of our clients held an Investment workshop. Folpic in partnership with us as their Broker and Allan Gray as their investment provider shared insight to shareholders on understanding Investments and how their current investments portfolio works. There was also an informative presentation from Njabulo Sithebe who is a Economist and he shared information The gaps and history in local market regarding investments as well as the effect of Global market on clients investments.
It was truelly a successful information sharing event where shareholders got to ask questions and engage with Kevin Yeh from Dabersitic who as a Wealth Manager with a focus on Unit Trusts in his presentation. Below is a picture of Kevin with the Folpic Management team . |
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