Fact File Offshore Flexible Investment Plan

Transcription

1 Fact File Offshore Flexible Investment Plan

2 Content 01 Discovery Invest Offshore Flexible Investment Plan 02 Premium payments to your Offshore Flexible Investment Plan 0 Fees applicable to your Offshore Flexible Investment Plan 04 Choosing the underlying funds for your Offshore Flexible Investment Plan 05 Tax clearance and tax on investment gains 06 Required documents 07 Death 08 Business practices Discovery Invest s Offshore Flexible Investment Plan The Offshore Flexible Investment Plan is built on innovative thinking, tax efficient structures and cutting edge investment strategies. These aspects ensure that you can take advantage of optimal investment opportunities all over the world. This Fact File is designed for your easy reference. It will allow you to understand your Offshore Flexible Investment Plan and how you can make it work for you.

3 01 The Discovery Invest Offshore Flexible Investment Plans 1.1 Premium payments to the Offshore Flexible Investment Plan You may make a once off lump-sum premium payment to the Offshore Flexible Investment Plan. These premiums can be in rands, US dollars, pounds and euros. 02 Lump-sum premium payments to your Offshore Flexible Investment Plan 2.1 Phasing in your lump-sum premium Initial Fees Lump-sum premiums may be phased in monthly. The total lump-sum premium will be invested in a money market account. This premium amount (plus interest) will be divided by the number of phase-in periods you chose and the amount derived will be withdrawn in the first month from the money market fund and invested proportionately in the investment options selected. In the second month, the remaining amount will be divided by the number of phase-in periods remaining and invested. This will continue until all the money is phased in. You can choose to phase your investment in over a period of, 6, 9, 12, 15, 18, 21 or 24 months. Your selected phase-in period (if applicable) is reflected on your policy schedule. 2.2 Fees applicable to your Offshore Flexible Investment Plan Certain fees will be payable on your Offshore Flexible Investment Plan. The fees are categorised into initial fees and annual fees and are payable to: Discovery Invest for administering your policy The custodian to cover these costs Your financial adviser for performing financial planning on your behalf The investment managers of the underlying investment choices you have selected. Discovery Invest Initial Fees There are no initial administration fees payable to Discovery Invest. Financial Adviser Initial Advice Fee Your financial adviser may charge an initial advice fee as a percentage of your lump sum contribution amount, which Discovery Invest will pay over to your financial adviser from your contributed amount. You can negotiate with your financial adviser to determine your initial fee. Investment Manager Initial Fees Please remember that certain investment management companies may charge initial fees for investing in their funds. The initial fees applicable to each fund can be found on the respective fund fact sheets available on 1

4 2.2.2 Annual Fees Discovery Invest annual administration fee You also pay an annual administration fee. This is not calculated based on the size of your initial premium payment but rather on the size of your investment fund. The percentage charged on an annual basis is 0.5%. Custodian fee You pay an annual fee of between 0.5% and 0.5% to cover custodian costs. This fee is based on the size of your investment fund. Please note: units in your investment fund are redeemed on a monthly basis as 1/12th of these fees. Financial adviser annual advice fees Your financial adviser may charge an annual advice fee as a percentage of your investment fund value for managing your investment fund. Units will be redeemed on a monthly basis for this as 1/12th of the advice fee selected, increased by VAT if applicable. Discovery will deduct these from your investment and pay these over to your financial adviser. Investment manager annual fees The investment managers to your underlying investment choices will normally charge an annual management fee as a percentage of your investment in their fund. This fee is divided by 65 and deducted daily in the unit prices provided by the investment manager to Discovery Invest. The annual fees that apply to each fund can be found on their respective fund fact sheets available on www. discovery.co.za. 0 Choosing the underlying funds for your Offshore Flexible Investment Plan.1 Investment choices that are available Your premium payment to the Offshore Flexible Investment Plan will be invested in the underlying investment options that you have selected. The investment options selected and the division of the premiums between these investment options will be reflected on your policy schedule.the funds available on the Offshore Flexible Investment Plan are chosen to give you diversification by currency, geographic region and asset class. The funds are managed by some of the most experienced international fund providers and cover a range of investment themes and geographic regions. Each fund is based in one of four major international currencies: US dollars Pounds Euros Should any of the underlying investment options be capped or cease to exist, Discovery Invest will request an instruction for a new selection from you. In the absence of an instruction from you we will hold your money in a money market account until such time as you have furnished Discovery with your instructions. 2

5 04 Switching between investment options You may switch between investment choices at any time, subject to Discovery Invest s practice at the time. The current practice (March 2017) is to allow four free switches per year. Additional switches will incur a fee of 0.25% of the amount switched. 05 Tax clearance and tax on investment gains To acquire an Offshore Flexible Investment Plan, you must first apply for a tax clearance certificate from the South African Revenue Service (SARS) for foreign investments. Investment gains will be subject to your applicable rate of tax. Discovery Invest will issue you with ITA and ITB tax statements for this purpose. It is your responsibility to pay the applicable tax on your Offshore Flexible Investment Plan. 06 Required documents In order to invest in the Discovery Offshore Flexible Investment Plan, you must provide original or certified copies of identity documents or passports as well as the relevant FICA documents (if your previous FICA documentation is older than months). If applicable, the original South African Reserve Bank clearance certificate as well as the South African Revenue Service clearance certificate may also be required for additional investments. 07 Death while invested in your Offshore Flexible Investment Plan Should you die while your investment is in force, the proceeds of your Offshore Flexible Investment Plan will be paid to your estate and distributed according to your will or the law.

6 08 Business practices 8.1 How should I issue instructions to Discovery Invest? Instructions must be given in writing on the relevant forms. These instructions must be given to Discovery Invest on fax or ed to invest_international_support@discovery.co.za. Copies of the forms are available from us on Will I receive regular statements on my investment? Discovery Invest will provide a quarterly statement reflecting your investment values and all transactions during a specified period (or previous quarter). 8. What happens if an investment choice that I selected is unavailable? 8.5 Fraud Your contract and all its benefits will be cancelled should you: Submit a fraudulent claim Use any fraudulent means or devices to make your claims Provide false information in order to obtain a benefit Knowingly allow anyone acting on your behalf to provide false information in order to obtain a benefit Deliberately and wilfully cause or conspire to cause the illness or disability that gives rise to a claim. It may happen that Discovery Invest is unable to continue offering a certain investment option as an investment choice. In this event, Discovery Invest will inform investors and will request an instruction to select a new investment choice. 8.4 Misrepresentation The information given to Discovery Invest in your application form, or any other documents that you provide in support of your application, will form the basis upon which your contract is issued. If you fail to disclose any information, or provide false information or distort information when applying for your contract, Discovery Invest will be entitled to suspend your cover from the inception date of your contract. In addition to this, Discovery Invest will also be entitled to: Refuse to pay out any current or future claims that are related to the misrepresentation or non-disclosure Adjust your premium or contribution from the date of the misrepresentation or non-disclosure Recover monies already paid to you for claims that relate to the misrepresentation or non-disclosure Cancel certain benefits or your entire contract with immediate effect, and retain any premiums or contributions paid to Discovery Life or Discovery Invest as a penalty. 8.6 Consent to disclosure You are required to consent to the exchange of information, including medical information, between Discovery Invest, Discovery Life, any medical practitioner you have consulted or any other life office, Discovery Health and Discovery Health Medical Scheme. 8.7 Contact details Please remember that in addition to talking with your financial adviser, if you have any questions or service needs, you can call us on You can also visit www. discovery.co.za for additional resources and an electronic version of this Offshore Flexible Investment Fact File (available as a PDF file). 4

7 Discovery Invest Contact Centre discoveryinvestsa Discovery_SA youtube/discoverysa Offshore Flexible Investment Plan is regulated by the Collective Investment Scheme Control Act (CISCA), which allows investors to choose a product that suits their needs. The investments in the selected Collective Investment Schemes in Securities (unit trusts) are made and administered subject to the provisions of Section 65 of the Collective Investment Schemes Control Act, No. 45 of 2002 (CISCA).Collective investment schemes in securities (CIS) are generally medium to long term investments. With regards to the money market portfolio, the price of each unit is aimed at a constant value. Fund prices are published each business day (with a day lag) on The total return to the investor is primarily made up of interest but, may also include any gain or loss on any particular instrument. In most cases this will merely have the effect of increasing or decreasing the daily yield, but in an extreme case it can have the effect of reducing the capital value of the Fund. While a constant price is maintained, the investment capital is not guaranteed. With regards to a Fund of Funds portfolio, a Fund of Funds is a portfolio that invests in portfolios of collective investment schemes, which levy their own charges, which could result in a higher fee structure for these portfolios. With regards to a feeder fund portfolio, a feeder fund is a portfolio that invests in a single portfolio of a collective investment scheme, which levies its own charges and which could result in a higher fee structure for the feeder fund. The manager does not provide any guarantee either with respect to the capital or the return of a portfolio. The value of participatory interests (units) may go down as well as up and past performance is not necessarily a guide to the future. Fluctuations or movements in exchange rates may cause the value of underlying investments to go up or down. The portfolio manager may borrow up to 10% of the market value of the portfolio to bridge insufficient liquidity. CIS are traded at ruling prices and can engage in borrowing and script lending. Forward pricing is used. Unit trust prices are calculated on a net asset value basis, which is the total value of all assets in the portfolio including any income accrual and less any permissible deductions from the portfolio. All portfolios are valued on a daily basis on any business day at 16H00, with the exception at month end, when portfolios are valued at 17H00. Investments and repurchases will receive the same price for that day if received prior to 11H00 for the money market portfolio and 15H0 for the other portfolios. This portfolio may be closed in order to be managed in accordance with the mandate (if applicable). Different classes of units apply to the fund and are subject to different fees and charges. Quantifiable deductions are the initial fee whilst non-quantifiable deductions included in the net asset value price may comprise brokerage, MST, auditor s fees, bank charges, trustee and custodian fees. Commissions and incentives may be paid and if so, would be included in the overall costs. Performance figures are based on lump-sum investment (if applicable). A schedule of fees and charges and maximum commissions is available on request from Discovery Life Collective Investments (Pty) Ltd. The TER shows the percentage of the average Net Asset Value of the portfolio that was incurred as charges, levies and fees relating to the management of the portfolio. A higher TER ratio does not necessarily imply poor return, nor does a low TER imply a good return. The current TER cannot be regarded as an indication of the future TERs. During the phase in period Total Expense Ratios do not include information gathered over a full year. Transaction Costs ( TC ) is a measure that can be used by investors and advisors to determine the costs incurred in buying and selling the underlying assets of a portfolio. This is expressed as a percentage of the daily NAV of the portfolio calculated over a period of three years on an annualised basis. Transaction Costs (TC) are a necessary cost in administering the fund and impacts the fund s returns. It should not be considered in isolation as returns may be impacted by many other factors over time including market returns, the type of fund, the investment decisions of the investment manager and the TER. Where a fund is less than one year old since inception, the TER and TC cannot be determined accurately because of the short life span of the fund and calculations are based on actual data where possible and best estimates where actual data is not available. The TER and TC shown are the latest available figures. Discovery Life Collective Investments (Pty) Ltd, the manager, is a member of the Association of Savings and Investments South Africa (ASISA). The investor confirms that neither Discovery Life Collective Investments (Pty) Ltd or any staff provided him/her with any advice (as defined in the FAIS Act) and that he/she has taken particular care to consider on his/her own or with the assistance of his/her intermediary whether the investment chosen is appropriate considering his/her individual needs, personal objectives and financial situation. GM_47410DI_25/07/17_V1 IOFFFE 06/16