Offshore diversification, explained without the jargon

Offshore allocation is often sold as a return story. It is better understood as a risk story: you are diversifying the currency your future spending is denominated in.

We start with a client's liability profile. Someone who will educate children abroad has hard-currency liabilities and should hold hard-currency assets, regardless of the exchange rate today.

Timing the currency is a separate decision from owning the currency, and conflating the two has cost more South African investors more money than almost any other error.