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: May 2024

Global markets resumed their upward march in May as mixed economic signals convinced investors that inflation in the US would decline and interest rates would still be cut this year.

Economic growth in the US was revised down in Q1, from 1.6% initially estimated to 1.3%, reflecting lower demand for durable goods including automobiles. A number of signs have suggested that the economy may be weakening. More Americans, for example, are falling behind on their credit card bills, and hiring is slowing, with businesses posting fewer open jobs. It is therefore hardly a surprise that consumer spending fell to a three-month low in April and the latest personal income and spending report shows a clear shift in consumers' willingness and ability to spend. Prices appear to be moderating too as the monthly personal consumption expenditure price index, one of the Fed’s preferred measures of inflation, tracked sideways in April and increased just 2.7% from a year ago. Despite the decline in annual inflation, some Fed economists are still sceptical about whether the central bank's long-term goal of 2% inflation will be achieved anytime soon. A new research paper by the Cleveland Federal Reserve, for instance, suggests a 2% annual rate of inflation might not be achievable until 2027.

Global developed markets surged in May, again led by technology companies as investors positioned for the start of an interest rate cutting cycle as the US economy shows signs of slowing. The MSCI World Index gained 4.5% in the month, with gains led by the information technology and communication services sectors which together account for a third of the index weighting and include companies like Microsoft, Apple, NVIDIA, Meta Platforms and Alphabet. Energy and consumer discretionary stocks lagged as oil prices dipped and consumer spending slowed. Emerging markets underperformed developed markets in May with gains of just 0.6% as the stronger dollar led to losses in China, South Korea, Brazil and Indonesia faltered. Global bonds gained 1.3% in May as the yield on developed market government bonds declined on renewed expectations that rate cuts would commence as early as September. The yield on the US 10-year Treasury ended the month at 4.5%, slightly below the four-week high of 4.6%. Global property stocks, sensitive to both US rates and consumer strength, jumped 4.1% as the potential benefits of lower interest rates outweighed the potential impact of weaker consumer spending.

In South Africa, inflation dipped slightly to 5.2% year-on-year in April with the main contributors being housing and utilities (up 5.8%), miscellaneous goods and services (up 7.2%), food and beverages (up 4.7%) and transport (up 5.7%). Manufacturing production decreased by 6.4% year-on-year in March with large declines noted in the production of motor vehicles, basic iron and steel products and machinery as well as petroleum, chemical products, rubber and plastic products. Mining production declined 5.8% with sharp declines in the production of coal, manganese ore, iron ore and platinum group metals. The recent record run of loadshedding-free days will no doubt have a positive impact on manufacturing and mining production and reduce the cost of doing business across all sectors of the economy. Consumer sentiment however remains depressed as household costs remain high. With the latest decision to leave interest rates unchanged at 15-year highs, the SARB appears to have prioritised fighting inflation over growth, putting further pressure on indebted households.

Local markets initially followed global markets higher but gave back gains late in the month as investors were spooked by coalition talks. The All Share Index ended the month with gains of just 1% as gains in rand-hedge industrials and resources offset weakness in local banks. Industrials gained 1.7% thanks to gains in Prosus, Richemont, BAT and Pick ‘n Pay, while resources gained just 1% as gains in Glencore and BHP offset losses in gold miners. Financials dipped 0.4% as sentiment towards insurers soured post the signing of the NHI Bill and banks sold off after the surprise election outcome. The rand strengthened sharply early in the month as the electricity outlook remained stable but gave back all gains near month end as preliminary election results showed the ANC losing their majority. The local currency ended the month at R18.76. Local bond yields tracked the currency, with the 10-year SA government bond reaching a low of 10.5% mid-month before retreating to 10.9% by month end. With yields ending the month where they started, the All Bond Index gained 0.8% for the month. Listed property stocks meanwhile eked out a gain of 0.2%.