Cheap Cash in Access Bond

[#1]

Hi All, I need some advice on what to do with some cheap capital sitting in my access bond. Original bond amount is R1000 000. Paid majority off within 6 years. Used approx R500K to invest in property mainly distressed sales (buy-to-let) over the last 2.5 years. I'm currently paying 7.5% interest on the bond. I want to invest at approx R200K in equities where at least the dividend covers the interest that I am paying on the capital, but also want to achieve some growth over the next 2 years as I believe interest rates will stay constant for at least 2 years. What shares would you recommend or should I just leave the remainder of funds in the bond?

[#2]

Go in one of the Satrix funds. Divi is a good option. Get decent growth and 4 times a year dividends

[AJT]

Jorge - difficult times and one never really knows what will happen in the future. Not sure what your home set-up is, i.e. kids education, etc, but have you thought of maybe sending some funds offshore while the rand is relativly strong? I am aware interest rates are virtually zero abroad, but by the sounds of things you do not have a problem servicing your monthly debt, so this would merely be a currency play and geographical diversification.

[#4]

Thanks for the responses, the wife bought a whole chunk of SATRIX DIVI in 2007 when it was launched at R1.27. It has been a decent investment. Will look at it. AJT, how would one take money offshore? Are there any instruments on OST that would enable me to do this?

[AJT]

I would suggest opening an account with say a Citi bank, Lloyds, HSBC, etc, most of them have offices in Jhb (can give you a Lloys address if you like). You then apply for a tax clearence certificate from SARS and can transfer funds into that account. Once hte money is over there, you could always buy blue chip shares on that side, but as mentioned, it provides you with geographical diversification..

[#6]

Thanks, looked up Lloyds in Sandton. Will be useful to have an account with them.

[AJT]

setting the account up via their offices here is much easier, due to the fact they can verify your identification details etc. Once set-up, I think they give you 6 weeks do make a small deposit into the account. They have a new International Premier Account, which is basically free of any monthly charges provided you maintain a minimum balance of £2500.00 in the pound account or $3500 in the dollar account or _2500 in the euro account...

[#8]

AJT, whats the details for lloyds in jhb? i have an account in london and need to discuss some things with them thanks

[AJT]

what is your e-mail address and I will forward details to you..

[Happy]

Jorge, have you had a look at the listed property funds? I took some funds from the bond of an investment property and put it into the listed property funds (Vukile, Resilient, Redifine) and for some off-shore exposure (then called) liberty international. In my opinion it is reasonably low risk and has good returns (note: interest paid and not tax free divs). Happy is happy so far!