Investments

Life stage (default)

The fund applies a life stage model which automatically takes members through different investment portfolios i.e. aggressive to more conservative portfolios as they near retirement age. The life stages are as follows:

Members younger than age 55 - Aggressive Growth portfolio
Members age 55 and older, but younger than age 62 -Capital Growth portfolio
Members age 62 and older - Stable Growth portfolio

The fund has implemented a phasing-in approach for default switches. Read more

The first 25% switch to the new recommended portfolio will commence at the end of a member’s birthday month. As a result, it will take 12 months for a total portfolio switch to be completed. After the 12 month phase-in period, all future member contributions will automatically accrue to the new default life stage portfolio. See an illustration of a default switch from the Aggressive Growth portfolio to the Capital Growth portfolio below.

*The first 25% switch to the new recommended portfolio will commence at thee end of a member's birthday month.

Member investment choice

The fund also allows flexibility in providing our members with the option to elect any of the individual investment portfolio options available.
Investment switch form

Aggressive Growth Portfolio

Investment objective: To maximise capital growth over a long-term investment horizon. Members should acknowledge that this strategy could deliver volatile and negative returns over the short-term. This strategy is suitable for members with more than 10 years to retirement.

Capital Growth Portfolio

Investment objective: :To target capital growth over a medium to long-term investment horizon. Members should acknowledge that this strategy could deliver volatile and negative returns over the short-term. This strategy is suitable for members with 5 to 10 years to retirement.

Stable Growth Portfolio

Investment objective: To target stable returns over a medium-term investment horizon with low volatility and a low probability of negative returns. This strategy is suitable for members with 1 to 5 years to retirement.

Capital Protector Portfolio

Investment objective: To provide capital security with very low volatility and an extremely low probability of negative returns. This strategy is suitable for members with less than 1 year to retirement where capital protection is absolutely necessary

Shari’ah portfolio

This portfolio is suitable for Muslim investors requiring a Sharia-compliant investment portfolio. The portfolio will be invested in a variety of domestic and international asset classes. The underlying investments will comply with Shari'ah requirements as prescribed by the Auditing Organisation for Islamic Financial Institutions. The portfolio targets capital growth over the long-term while limiting short term market fluctuations.

Latest investment returns

Economic Commentary: March 2024

Global markets ended the first quarter with gains in March as confidence in the sustainability of US growth and an anticipated recovery in economic activity in other parts of the world trumped concerns that interest rates would stay higher for longer.

The U.S. economy showed little sign of decelerating, with recent purchasing managers index data showing a solid improvement in manufacturing activity in March. Job growth remains steady with the economy adding 275000 new jobs in February and similar strength expected in March. Inflation dipped slightly in February, with the consumer price index rising 3.2% year-on-year although the 3.8% year-on-year rise in core CPI (which excludes food and fuel prices) was 0.1% higher than expected. Rising fuel prices drove overall inflation, while rising shelter costs kept core inflation high. With home prices expected to rise this year and rents falling only slowly, the long-awaited fall in shelter prices isn’t coming to the rescue any time soon and investors now expect just three interest rate cuts this year, starting in June. The tone of the Federal Reserve’s latest statement on monetary policy suggested ongoing data dependence as members assess the timing and magnitude of recalibrating interest rates. Signs of consumer strain remain with retail sales growing by just 0.6% month-on-month in February, following a revised 1.1% decline in January. Consumer stress has also manifested in the housing market, where sales trended downward as high mortgage rates and home prices, coupled with historically low housing stock, continued to hinder homeownership, particularly for first-time buyers. Despite these challenges, the estimate for real GDP growth in the first quarter of 2024 remains at a robust 2.1%.

Global markets ended the quarter with further gains in March, although gains were this time led by financial, industrial, energy and basic materials stocks as investors shifted their capital away from richly valued technology companies to seemingly undervalued sectors with the potential to rebound. The MSCI World Index gained 3.3% in the month, with financials- and materials-dominant markets like the UK, Germany and Japan leading gains this month. Emerging markets underperformed developed markets in March, weighed down by poor returns from Chinese stocks as investors reacted ambivalently to recent stimulus measures. Global bonds gained 0.6% for the month as yields on developed market government bonds were largely stable. The yield on the US 10-year Treasury ended the month unchanged at 4.2% as investors maintained their view that interest rate cuts would be back-ended in 2024. Global property stocks gained 2.9% as investors bet on a continued recovery in economic activity.

In South Africa, inflation edged higher to 5.6% year-on-year in February – slightly higher than expected – driven by higher transport and utility costs. Economic activity remained subdued although there was a slight uptick in industrial production and a concomitant increase in the purchasing manager’s index as electricity production stabilised. Mining sector production however declined year-on- year as weak global demand led to falling commodity prices. Consumer sentiment remains depressed with retail sales falling 3.2% in January as the consumer remains financially stressed amid continued high interest rates, rising prices and high unemployment. The overall outlook for economic growth remains poor with sub 1% growth expected over the medium term.

Local markets benefited from a surge in the gold price and renewed investor interest in mining companies, as well as strong gains from Naspers. The All Share Index gained 3.2% in the month, as resources stocks surged 12.8%, industrials gained 2.6% and Naspers added 6.5%. Gold miners rose sharply with Harmony gaining 40% and Goldfields up 22% as the gold price rose 10% to over $2200 an ounce. Diversified miners Anglo American and Glencore rallied 14% and 12% respectively as the Goldman Sachs Commodity Index gained over 5%. Financial stocks however fell 3.5% as large banks Absa and Standard Bank dropped 9% and 8% respectively and insurer Discovery shed over 10%. The rand surprisingly strengthened 2.5% against the dollar to end the month at R18.90 as higher commodity prices boosted the local currency. Local bond yields rose despite the stronger currency as investors focused on longer-term economic fundamentals. The yield on the 10-year SA government bond ended the month at 10.88%, resulting in the All Bond Index declining 1.9% for the month. Listed property stocks dropped 1% as higher funding costs and stronger rand weighed on the sector.