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: Jan 2025

Global markets delivered strong returns to start the year with a pronounced shift in market leadership from the US to Europe. Volatility rose late in the month as market participants assessed the impact of President Trump’s unorthodox economic policies.

Within 11 days of setting foot in the White House, US President Donald Trump signed as many as 45 executive orders on subjects including, but not limited to, energy security; immigration; international trade; foreign policy; diversity, equity and inclusion (DEI); transforming the civil service; and technological deregulation. These actions, along with the tariffs announced late in the month, illustrate Trump’s “America First” agenda and are likely to have a significant negative impact on global trade and inflation. If fully implemented, the announced tariffs could raise inflation in the US by 0.3% to 0.6% over the next 3 to 6 months and reduce US growth by between 0.7% and 1.1% over the next year. Meanwhile, GDP growth slowed to an annualised 2.3% in the fourth quarter, bringing economic growth to 2.8% for the calendar year, slightly below expectations. As usual, consumer spending was the largest contributor to GDP, rising 4.2% but there are concerns that this rate of spending is not sustainable as consumers appear to be dipping into their savings to fund consumption. The relative resilience of the economy and the decline in inflation has however given the Federal Reserve reasons to pause the interest rate cutting cycle. Investors now expect just two 0.25% interest rate cuts in 2025.

Global developed markets rose in a volatile January as investors weighed up the negative impact of US tariffs on inflation against generally positive earnings reports and robust economic growth in both the US and China, with the latter growing by 5.4% in 2024. The MSCI World Index gained 3.5%, driven by large gains in communication services stocks, as well as financial and healthcare stocks. European markets led gains with Germany’s DAX up over 9% and the UK’s FTSE 100 up over 6% for the month as investors rotated to less expensive sectors and regions. The US’ S&P 500 lagged global markets with gains of 2.8% in January as the release of the Chinese AI app, DeepSeek, forced investors to question the high valuations of many US technology companies. The S&P 500 Information Technology sector declined 2.9% while all other sectors posted strong gains as chip manufacturers like NVIDIA (down 11%) and other companies in the AI supply chain (networking services, data centres etc.) fell sharply. Emerging markets gained 1.8% as Korea, South Africa, Brazil, and Eastern Europe, outperformed. The threat of tariffs and other measures to restrict trade dampened enthusiasm for emerging market assets late in the month. Global bonds gained 0.6% in January as yields on developed market government bonds remained stable, while global property stocks gained 1.5% as investors focused on improving fundamentals amid a stable, albeit elevated, interest rate environment.

In South Africa, annual inflation rose slightly to 3% in December (from 2.8% in October) as lower transport costs (used vehicle prices fell 0.6% and fuel costs declined 10% from a year ago) offset price gains in housing and utilities (+4.4%), bread and cereals (+3.7%), and hot beverages (+13.5%). Economic activity remains subdued as the improvement in consumer confidence – retail sales rose 7.7% in November – is yet to filter through to business activity. Optimism around SA’s economic prospects continues to rise and economists now expect growth of at least 1.5% in 2025. Meanwhile, the Reserve Bank’s monetary policy committee (MPC) lowered the benchmark interest rate by 0.25% to 7.5%, marking the third consecutive rate cut. The central bank’s decision, supported by four of six MPC members, signals a measured approach to monetary policy amid increasing inflation risks. Analysts predict two more 0.25% cuts in March and May, although global risks – especially potential trade tariffs – that result in rand weakness could push import costs and inflation higher and force the SARB to pause cuts or even reverse course.

Local equity markets gained sharply as resources and industrial stocks rallied. The 2.3% gain for the All Share Index was driven by gains of 18% in resources stocks, as gold miners and platinum stocks rallied on higher commodity prices. Industrial stocks gained 1.1% as the 30% gain in Richemont was offset by a 5% decline in Naspers. Financials stocks declined 2.7% as optimism surrounding the GNU faded after the President signed the Expropriation Act into law. The rand surprisingly strengthened by 1% in contrast to most other emerging market currencies to end the month at R18.66 to the dollar. Local bonds gained 0.4% for the month as the high coupon offset the capital losses stemming from a slight rise in yields as investors priced in uncertainty surrounding the GNU as well the risks related to Trump’s policies. Listed property stocks declined 2.3% as sentiment waned on the back of continued high interest rates relative to the rest of the world and the (temporary) resumption of loadshedding.