Benefits

Quality Focused

Quality businesses are characterised by strong balance sheets, established brands, and consistent earnings. They tend to perform relatively well during downturns and deliver typically above-average risk-adjusted returns over the long term.

Top Fund Managers

The portfolio provides access to a diverse range of funds managed by leading professionals, extending beyond offshore options available in South Africa.

Expert Fund Selection and Oversight

Our team of experienced offshore investment professionals is tasked with selecting and monitoring the funds, ensuring informed decisions that align with the portfolio's strategy.

Diversification

The portfolio's diverse range of funds helps to spread risk across different fund managers, sectors and geographies, reducing the risk of an unsatisfactory outcome.

Cost Efficient

A portion of the portfolio is allocated to high-quality passive funds, which helps maintain low overall costs. As an institutional investor, FIM Capital also benefits from reduced fund fees, further enhancing cost-effectiveness.

Tax Efficient**

South African investors are not subject to situs tax, as all underlying investments are in registered funds domiciled in UK situs free jurisdictions. Opting to hold accumulating as opposed to distributing funds means investors are able to compound dividends tax free. If a repurchase is requested, the increase in value will then be subject to capital gains as opposed to normal income tax.

Efficient Estate Planning – no Probate

The options of a death bed donation and/or joint account are available as estate planning features*.

Asset Swap**

Where South African investors have reached their foreign investment allowance limit, they can utilise Marriott's asset swap capacity to invest into the Smart International Equity Portfolio at no cost. This facility is also available to trusts and companies.

Consolidated Reporting

Investors receive biannual statements that aggregate their investments, offering a comprehensive view of portfolio performance. Statements can be viewed online at anytime.

*Based on historical real returns of current portfolio holdings over the last 10 years. Expected returns are not a guarantee of future performance. **South African Investors

Quality Investing

Quality businesses typically showcase strong balance sheets, established brands, consistent earnings, and substantial free cash flow. They tend to perform well during downturns and deliver above-average risk-adjusted returns over the long term.

Historically, equity managers were primarily categorised as either growth or value oriented. Today, quality investing has emerged as a distinct and effective approach embraced by many global asset managers. While funds in this category often share common traits, each remains unique. A thoughtfully selected blend of these funds can therefore improve risk-adjusted outcomes.

"It's far better to buy a wonderful company at a fair price than a fair company for a wonderful price." – Warren Buffett

Fund Selection Technical Information Summary Additional Benefits

Fund Selection

Marriott's income-focused investment style is built on quality businesses, and our offshore partners at FIM Capital have extensive experience in fund selection. Since 2011, FIM Capital have successfully managed fund-based portfolios, leveraging their location in the Isle of Man for access to top managers in both the US and UK. This combination of hands-on quality asset management experience and our offshore platform allows us to identify the most complementary funds in the quality investment space. The result is a well-diversified portfolio that leverages the expertise of top fund managers, with an emphasis on high-quality businesses, long-term ownership, and proven track records.

Fundsmith Equity Fund

Fundsmith is a highly regarded UK-based investment management firm which manages £36 billion in assets. The Fundsmith Equity Fund, launched in 2010, serves as the firm’s flagship portfolio. It follows a well-defined investment philosophy aimed at long-term capital growth by investing in 20-30 high-conviction companies with strong fundamentals and minimal debt reliance. This focus on quality, coupled with a long-term buy-and-hold strategy through market fluctuations, has enabled the fund to deliver annual returns of nearly 15% in Sterling since inception. These attributes make the fund ideally suited for inclusion in the Smart International Equity Portfolio.

Dodge and Cox Global Stock Fund

Dodge & Cox, one of the largest independently owned investment firms globally, manages $363 billion in assets as of the end of 2023. The Dodge & Cox Global Stock Fund is managed by an experienced team that evaluates companies based on financial strength, competitive position, management quality, and economic context, with a strong focus on stock valuation. Dodge & Cox seeks companies that are temporarily undervalued by the market but also exhibit strong fundamentals and long-term growth potential. As of 30 September 2024, the Global Stock Fund has achieved an annualised USD return of 9.5% since its inception almost 50 years ago, underscoring its enduring value within a portfolio.

BlackRock

iShares Core S&P 500 UCITS ETF:

The iShares Core S&P 500 UCITS ETF is managed by BlackRock, the world's largest asset manager and second-largest provider of passive investment funds. With an expense ratio of just 0.07% and $100 billion in assets under management, the ETF provides cost-effective exposure to the U.S. stock market. Although the fund is passively managed, it maintains a strong quality bias as the underlying S&P 500 Index is dominated by some of the largest and highest-quality companies globally – including Microsoft, Apple, and Alphabet. As such, the ETF offers investors low-cost, diversified access to a broad range of market-leading businesses and is an excellent complement to the actively managed funds within the Smart International Equity Portfolio.

Minimum investment amount*

Individuals: $30,000

Entities and Trusts: $125,000

Initial Fee

Custody Fee

0.1%

Financial Advisor Fee

Maximum 3%. Payments processed twice a month. Deducted from consideration received.

Financial Advisor Annual Advisor Fee

Maximum 1% p.a. Paid quarterly in arrears. Deducted from capital quarterly.

Investment Management Fee*
(Deducted from capital quarterly.)

Investment amount

Total (excl. VAT)#

‹ $60,000

0.75%

$60,000 +

0.50%

The underlying funds in the portfolio will also charge an annual management fee, at institutional rates in addition to the above.

# For clients based outside of the EU the investment Management Fee does not attract Isle of Man VAT (20%).

Brokerage Fees and other Duties

Relevant payment charges, charged by third parties when placing trades, will be passed on in full.
Brokerage fees will usually be charged at institutional rates as negotiated by FIM Capital Limited.
Payment charges will be levied on the purchase of underlying funds.

Income Payments

N/A. All funds are accumulating so there is no income produced

Client Reporting

Biannual Valuations (28 February & 31 August)
Consolidated tax voucher and interest certificate annually

Tax Clearance

SARS permits an annual foreign investment allowance of R10 million for individuals, and an annual discretionary allowance of R1 million per year. The latter does not require a tax clearance certificate.

If you have reached your individual limit for the year then you can make use of the Marriott asset swap capacity at no extra cost. Please contact the Client Relationship Team for more details.

*The equivalent currency amounts have been provided using current exchange rates.

Estate Planning Features

The options of a death bed donation and/or joint account are available as estate planning features.

Death Bed Donation

A death bed donation is the permissible mechanism in South Africa for transferring ownership of South African citizens and foreign nationals with South African estates to the other individuals / joint investors. The investment will not form part of an offshore estate for probate purposes.

From a South African tax perspective death bed donations are deemed to be dutiable property of the deceased estate** and therefore still attract estate duty. To avoid double taxation, however, they are excluded from donations tax#.

**in terms of Section 3(3)(b) of the South Africa Estate Duty Act #in terms of section 56(1) of the South African Income Tax Act

Joint Account Holders

There are two options for joint investors. One option is where, in the event of the death of one joint holder, the whole of the portfolio will automatically vest in the joint surviving holder or holders. The other option is where joint investors elect individual death bed donations. In this option, in the event of the death of one joint holder, the donation has precedence and the investor's portion of the account will be transferred to the listed beneficiaries and does not vest in the surviving joint holder.

Joint accounts and death bed donations can be elected in the International Investment Mandate. Investors are encouraged to seek independent tax advice suitable to their personal circumstances.

Smart International Equity Portfolio

What is the Smart International Equity Portfolio?

Who is it for?