Many investors worldwide have experienced the benefits and cost savings associated with mutual fund investing as opposed to assembling a portfolio of individual securities and making the day-to-day investment decisions associated with that portfolio.
Nordica conducts first-hand reviews and develops model portfolios for asset allocation strategies. By recommending investors the appropriate selection of third party fund managers and funds, we effectively allow our Partners to spend more time selling and servicing their clients.
Nordica currently has selling agreements in place with more than 20 different offshore fund companies representing a broad range of investment alternatives including hedge funds, structured derivatives, guaranteed products, and mutual funds.
Offshore funds and fund managers are not faced with the same investment and trading restrictions normally associated with onshore funds; as a result, there are all sorts of very interesting funds available offshore. Also, offshore funds have more a global mentality versus domestic funds.
A professional investment manager manages offshore funds for the benefit of fund investors, like their onshore counterparts, the only difference is that they are located (domiciled) in a no-tax or low-tax jurisdiction. Another advantage is that both switching between funds and re-invested distribution occur tax-free.
Several approaches can help in crafting an investment program that keeps taxes to a minimum:
- Deferring taxes on your investments for as long as possible.
- Choosing low-tax jurisdictions.
One of the most common vehicles for U.S. investors to access these funds is via an offshore variable annuity or variable life insurance. These products are ideal for onshore investors because they are tax efficient and can be easily set up. Clients are already aware of the advantages of insurance products – these include tax efficiencies, estate planning, and the various types of investments which qualify within life insurance products and annuities.
To conclude, the above information have outlined why it is important to consider offshore funds for your clients’ investment strategy. Confidentiality, tax savings, capital appreciation are all-important factors in attracting investors offshore. Other factors include minimizing risk, asset allocation, and diversification.