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: Dec 2024

Uncertainties around the incoming Trump administration’s policies and the possibility of higher-than-expected interest rates for the coming year dampened investors’ enthusiasm in December, resulting in losses across most global markets.

As expected, the US Federal Reserve lowered interest rates in December to keep a steady but cooling economy stable. The Fed now projects just two interest rate cuts for 2025 as the unemployment rate remains low, while the rate of inflation "remains somewhat elevated." The latest inflation rate, at 2.7%, was slightly higher than the previous month and thanks to a strong economy, Fed officials don't believe they'll hit the 2% inflation target until 2026. November retail sales data suggests that high inflation is not slowing down the consumer as sales increased 0.7% in November, from an upwardly revised 0.5% in October, and December sales are expected to be over 8% higher than a year ago. The labour market however paints a less rosy picture with hiring remaining concentrated in sectors like healthcare and government, instead of sectors like manufacturing, business and professional services that are more aligned to a fast- growing economy. While it appears the US has pulled off an economic soft landing (reducing inflation without a recession), economists are debating whether higher interest rates may be needed given structural changes in the economy that have led to faster growth, such as the large fiscal deficit and elevated productivity growth.

Global developed markets gave back some of November’s gains as investors priced in higher interest rates for longer. The MSCI World Index declined 2.6%, driven by losses in economically sensitive materials and energy stocks, as well as industrials and healthcare. Despite these losses, the global equity benchmark gained over 18% for the year. The US’ S&P 500 fell 2.6% in December but despite the relatively weak fourth quarter, still gained 25% for the year as communication services and technology stocks drove market returns. Top gainers for the year include NVIDIA (+170%), Broadcom (+108%), Tesla (+60%) and Amazon (+46%). Emerging markets fell just 0.1% for the month as the announcement of more aggressive stimulus measures in China helped limit losses from other export-led and commodity producing nations like South Africa, Brazil and South Korea. Returns for the year, at just 7.5%, were negatively impacted by the stronger dollar and lower commodity prices, as gains in China, India and South Africa were offset by large declines in Mexico and Brazil. Global bonds declined 2.2% in December (-1.7% for the year) as yields on developed market government bonds rose on expectations of a slower rate of interest rate normalisation in the US. Global property stocks bore the brunt of the bearish interest rate outlook and fell 7.1% to reduce gains for the year to just 2.4%.

In South Africa, economic growth proved elusive, with Q3 GDP declining 0.3% following a 0.3% gain in Q2. The decline in activity was attributed to a sharp decline in agricultural production (down 29% year-on-year). While a decline was anticipated due to a challenging mid-summer drought, the extent of the decrease was surprising. In response, Agri SA and Agbiz requested the Bureau for Food and Agricultural Policy (BFAP) to conduct a detailed analysis of the data. Their analysis indicates that the decline in real agricultural GDP in the first three quarters of 2024 should be between 5% and 6%, as opposed to the current official decline of 15.5%. StatsSA has acknowledged the challenges in sourcing reliable data and has committed to engaging with relevant stakeholders to improve data integrity. Meanwhile, annual inflation rose slightly to 2.9% in November (from 2.8% in October) as lower transport costs (down 3.3% year-on-year) offset price gains in housing and utilities, food, and beverages. Manufacturing production improved slightly in October (up 0.8%), while retail sales saw a much bigger improvement (up 6.3% year-on-year) as consumer confidence improved. With aneamic economic growth and low inflation, there is scope for the Reserve Bank to lower interest rates further in the new year.

Local equity markets followed global markets lower in December. The 0.3% loss for the All Share Index caps off three consecutive monthly declines as losses in resources and financials stocks overwhelmed gains in industrials stocks. Industrials benefited from gains in rand hedges British American Tobacco, Naspers and Richemont, while resources stocks fell sharply as commodity prices declined. After a promising first half, the local market ended the year with a gain of 13.4%. The rand weakened 4.5% along with most other emerging market currencies to end the month at R18.76 to the dollar. Despite recent weakness, the local currency was one of the better- performing emerging market currencies in 2024, gaining 1% against the US dollar for the year. Local bonds fell 0.3% for the month as yields rose in line with global yields but closed the year with a gain of over 17%. The 10-year government bond yield ended the year at 9.03%. Listed property stocks gained 0.4% to end the year with a gain of 29% as the sector benefited from lower funding costs and improved sentiment.