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: July 2024

Global markets edged up in July as investors rotated out of mega-cap technology stocks into financial, industrial and materials stocks on rising concerns that the lofty growth expectations baked into the valuations of technology companies were not sustainable.

Inflation in the US slowed to 2.5% from a year earlier as declines in the prices of goods, especially cars and fuel, offset rises in the prices of services. With cooling inflation and a weaker jobs market, the Federal Reserve decided to leave interest rates unchanged in their July meeting (for the eighth consecutive time) but signalled that a September rate cut is in the cards as high interest rates have had the desired impact of cooling the economy. A softening economy is affecting business confidence with the latest Chicago Purchasing Managers’ Index dropping to 45.3 points, from 47.4 points the previous month. The labour market too has softened, with job openings and hiring falling. Consumer confidence remains high, but their perceptions of the labour market are deteriorating with a survey from the Conference Board showing that the share of consumers who viewed jobs as "hard-to-get" rose to the highest level in more than three years. The housing market has softened, with annual price gains limited to 5.7%, despite mortgage rates having declined from highs earlier in the year.

Increased uncertainty regarding the sustainability of AI-related profits for global technology companies and a mixed bag of earnings reports led to heightened volatility across global markets. The MSCI World Index gained 1.8% in the month following a last-minute surge in semi-conductor stocks. Gains for the month were led by financials (up 5.8%), industrials (up 4.6%) and materials (up 3.6%) as communication services companies (down 3%) and other technology companies (down 2%) suffered losses. The tech-heavy NASDAQ index shed 1.6% for the month in which NVIDIA fell as much as 25% before staging a 13% rebound on the last day of trading. It appears that investors have become weary of the valuations of US technology companies and are seeking returns in other sectors and regions. Emerging markets lagged developed markets in July with gains of 0.4% led by losses in Taiwan and Argentina with the former impacted by the sell-off in semi-conductor stocks and the latter suffering from further currency depreciation. Global bonds rallied 2.8% in July as the yield on developed market government bonds declined steadily through the month on expectations of a decline in US interest rates. The yield on the US 10-year Treasury ended the month at 4.03%, down close to 50bps from the previous month. Global property stocks surged 5.7% as the sector looked forward to an imminent reduction in interest rates in the US.

In South Africa, prices rose 0.1% in June and annual inflation dipped to 5.1% with the main contributors being housing and utilities, food and transport. Producer prices dipped by 0.3%, with the annual rate of 4.6% suggesting that consumer prices should fall further in coming months as input prices decline. Retail sales growth meanwhile remains pedestrian, with consumption increasing just 0.8% from a year earlier in May as a drop in clothing purchases offset sales at general dealers, food, beverage and tobacco retailers and furniture stores. On the production side, manufacturing production declined 3.2% in May for an annual drop of 0.6% as factories produced fewer cars and parts, and less chemicals and petroleum products. Mining production also dropped in May with the annual growth rate pegged at zero due to a sharp decline in the production of coal and iron ore. South Africa posted a trade surplus of R24bn in June, the largest in over two years, as a drop in exports of PGM’s, coal and vehicles was offset by a larger drop in imports. Despite inflation trending down, the SARB kept interest rates unchanged at the July MPC meeting noting that the risks to inflation remain to the upside due to elevated interest rates globally and large rises in administered prices locally.

Local markets grinded steadily higher on the back of improved investor sentiment and an improvement in the outlook for commodity producers. The All Share Index ended the month with gains of 3.9% as financials (up 5.2%) and resources (up 5.5%) surged. Industrials gained just 2% as rand-hedge stocks Prosus and Richemont declined. The rand strengthened slightly through the month, reaching a low of R17.95 against the dollar mid-month before retreating to end the month at R18.21 to the dollar. Local bond yields continued to fall as the currency gained and global rates declined. With the yield on the 10-year SA government bond ending the month at 9.4% (from 10% the previous month), the All Bond Index gained 4% for the month. Listed property stocks meanwhile jumped 4.4% on rising expectations for a cut in interest rates at the next monetary policy meeting.