An offshore model share portfolio: Conservative Blue Chips for Income

A R31 million rand single offshore portfolio example

This portfolio includes shares denominated in the following currencies:

  1. United States USD, US Dollar
  2. European Union EUR, The Euro
  3. United Kingdom GBP, British Pound
  4. Switzerland CHF, Swiss Franc
  5. South Africa ZAR, South African Rands (nothing other than local management fees)

Fully invested because of low offshore interest rates

The portfolio is fully invested in long only share positions. There is very little cash in the account. Reason for this is the little to no interest received offshore, when compared to South Africa – US (1¼%), Euro area (0%), Switzerland (negative interest rate, -¾%), UK (¼%). This is much lower than our local repo rate of 6¾%.

In short: if you sit on offshore cash then you might be losing out in terms of opportunity cost on forgone dividend income. Check out rates and offshore stats on tradingeconomics.com.

Constituents

The portfolio consists of just 15* shares, pretty much all of them blue chip companies, with steady returns and decent dividends. The exception to the rule is Facebook, which was a small speculative purchase that paid off very well, with a 30+% return to date. Another exception was entering a Steinhoff position that was at least double the size of the other average buys. *The telecoms position was split between two companies, AT&T & Verizon.

Portfolio view

Some of the worlds largest companies

How many of these companies do you recognize?

Our selected offshore shares at the time of opening the portfolio, today’s will differ.

1. HSBC

HSBC Holdings PLC is a British multinational banking and financial services holding company, tracing its origin to a hong in Hong Kong. CEO: Stuart Gulliver (Jan 1, 2011–). Headquarters: London, United Kingdom. Revenue: 47.96 billion USD (2016) Did you know: HSBC Holdings PLC is the seventh-largest bank in the world by total assets ($2,374.03 B).

HSBA:LSE

2. Allianz

Allianz SE is a German financial services company headquartered in Munich, Germany. Its core businesses are insurance and asset management. CEO: Oliver Bäte (May 7, 2015–). Revenue: 95.76 billion EUR (2015). Number of employees: 142,697 (2015). Subsidiaries: PIMCO, Allianz Global Corporate & Specialty SE, etc. Did you know: Allianz is the world’s third-largest financial services company by revenue ($140.3 B).

ALV:ETR

3. Facebook

Facebook is an American for-profit corporation and an online social media and social networking service based in Menlo Park, California. Founded: February 2004, Cambridge, Massachusetts, United States. Number of employees: 17,048 (December 31, 2016). Founders: Mark Zuckerberg, Dustin Moskovitz, Eduardo Saverin, Andrew McCollum, Chris Hughes. Subsidiaries: WhatsApp Inc., Oculus VR, Onavo, Atlas Solutions, etc.

FB:NAS

4. Nestle

Nestlé S.A. is a Swiss transnational food and drink company headquartered in Vevey, Vaud, Switzerland. It has been the largest food company in the world, measured by revenues and other metrics, for 2014, 2015, and 2016. Revenue: 89.46 billion CHF (2016). Subsidiaries: Nestlé Purina PetCare Company, Garoto, etc. Founders: Henri Nestlé, George Page, Charles Page. Did you know: Nestlé is the second-largest Swiss company by revenue (91 075 million Swiss franc).

NESN:SWX

5. Walmart

Wal-Mart Stores, Inc., doing business as Walmart, is an American multinational retailing corporation that operates as a chain of hypermarkets, discount department stores, and grocery stores. Headquarters: Bentonville, Arkansas, United States. Founder: Sam Walton. Subsidiaries: Sam’s Club, Asda Stores Limited, Jet.com, Bonobos, etc. Did you know: Walmart is the world’s largest company by revenue.

WMT:NYS

6. Johnson & Johnson

Johnson & Johnson is an American multinational medical devices, pharmaceutical and consumer packaged goods manufacturing company founded in 1886. Headquarters: New Brunswick, New Jersey, United States. CEO: Alex Gorsky (Apr 26, 2012–). Revenue: 71.89 billion USD (2016). Subsidiaries: Janssen Pharmaceutica NV, Ethicon Inc., etc. Did you know: Johnson & Johnson is the world’s largest independent biotech company by market cap ($356.1 B).

JNJ:NYS

7. Cisco Systems

Cisco Systems, Inc. is an American multinational technology conglomerate headquartered in San Jose, California, in the center of Silicon Valley, that develops, manufactures and sells networking hardware, etc. CEO: Chuck Robbins (Jul 26, 2015–). Revenue: 49.24 billion USD (2016). Subsidiaries: Cisco WebEx, Cisco Meraki, AppDynamics, etc.

CSCO:NAS

8. Proctor & Gamble

Procter & Gamble Co., also known as P&G, is an American consumer goods corporation headquartered in downtown Cincinnati, Ohio, United States of America, founded in 1837 by William Procter and James Gamble. Stock price: PG (NYSE) $92.42. CEO: David S. Taylor (Nov 1, 2015–). Revenue: 65.29 billion USD (2016). Subsidiaries: Gillette, Braun, Wella, The Art of Shaving, etc. Founders: James Gamble, William Procter

PG:NYS

9. Merck & Co

Merck & Co., Inc., d.b.a. Merck Sharp & Dohme outside the United States and Canada, is an American pharmaceutical company and one of the largest pharmaceutical companies in the world. CEO: Kenneth C. Frazier (Jan 1, 2011–). Headquarters: Kenilworth, New Jersey, United States. Revenue: 39.5 billion USD (2015). Number of employees: 70,000 (2015). Subsidiaries: Intervet Inc, Organon International, etc.

MRK:NYS

10. Wells Fargo

Wells Fargo & Company is an American international banking and financial services holding company headquartered in San Francisco, California. CEO: Timothy J. Sloan (Oct 12, 2016–). Subsidiaries: Wells Fargo Advisors, etc. Founders: William Fargo, Henry Wells. Did you know: Wells Fargo & Co. is the 10th-largest bank in the world by total assets ($1,930.12 B).

WFC:NYS

11. Daimler

Daimler AG is a German multinational automotive corporation. Daimler AG is headquartered in Stuttgart, Baden-Württemberg, Germany. Stock price: DAI (ETR) €68.88. Production output: 3,041,371 (2016). Profit: €8.784 billion (2016). CEO: Dieter Zetsche (Jan 2006–). Revenue: 153.3 billion EUR (2016). Subsidiaries: Mercedes-Benz, Mercedes-AMG, smart, etc.

DAI:ETR

12. AB Inbev

Anheuser-Busch InBev SA/NV is a Belgian–Brazilian beverage and brewing company with global headquarters in Leuven, Belgium. Headquarters: Leuven, Belgium. CEO: Carlos Brito (2008–). Revenue: 45.52 billion USD (2016). Number of employees: 200,000 (January 2017). Subsidiaries: InBev, Anheuser-Busch, SABMiller, Grupo Modelo, etc. Founders: InBev, Anheuser-Busch.

ABI:BRU

13. Verizon

Verizon Communications, otherwise known as Verizon, is an American multinational telecommunications conglomerate and a corporate component of the Dow Jones Industrial Average. Headquarters: New York City, New York, United States. Revenue: 126 billion USD (2016). Subsidiaries: Verizon Wireless, AOL, Verizon Fios, Oath Inc., etc. Did you know: Verizon is the fifth-largest multichannel video service provider in the US by total subscribers (4,700,000).

VZ:NYS

14. AT&T

AT&T is the world’s largest telecommunications company, an American multinational telecommunications conglomerate, headquartered at Whitacre Tower in downtown Dallas, Texas. CEO: Randall L. Stephenson (May 9, 2007–). Founder: Bell Telephone Company. Founded: October 5, 1983, Delaware, United States. Subsidiaries: DIRECTV, Cricket Wireless, AT&T Mexico, etc. Did you know: AT&T is the largest multichannel video service provider in the US by total subscribers (30,100,000).

T:NYS

15. General Electric

General Electric is an American multinational conglomerate corporation incorporated in New York and headquartered in Boston, Massachusetts. Founded: 1892, Schenectady, New York, United States. Revenue: 123.7 billion USD (2016). Subsidiaries: GE Healthcare, GE Capital, GE Lighting, GE Aviation, etc. Founders: Thomas Edison, Charles A. Coffin, Elihu Thomson, Edwin J. Houston.

GE:NYS

16. Steinhoff

Steinhoff International is a German international retail holding company that is based in South Africa. Headquarters: Netherlands. Revenue: 104.7 billion ZAR (2015–2016). Founder: Bruno Steinhoff. Founded: 1964. Key person: Markus Jooste (CEO). Subsidiaries: Harveys Furniture, Mattress Firm, JD Group Ltd., etc.

SNH:ETR

Leave a Reply

Your email address will not be published. Required fields are marked *

Scroll Up