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: Feb 2025

The shift in equity market leadership from the US to Europe continued into February with the US markets driven lower by tariff concerns, sticky inflation and softer economic data, while European stocks benefited from strong earnings, attractive valuations and a market-friendly outcome in Germany’s election.

The announcement by the US of tariffs against neighbours Mexico and Canada, and additional tariffs on China (effective 4 March), as well as widespread job losses as part of the new administration’s efficiency strategy led to the biggest drop in consumer confidence since August 2021. Meanwhile, rising prices and a delay in interest rate cuts are likely to further depress consumption. With annual US inflation coming in at a higher-than-expected 3% in January, and tariffs likely to add further upside pressure to prices, the Federal Reserve indicated they are in no rush to cut interest rates and bond market pricing implies just two interest rate cuts this year. However, the sharp drop in sentiment, coupled with a housing market that appears close to breaking point as affordability reaches 30-year lows suggests that a slowdown in consumption-led economic activity is imminent which may force the Fed’s hand (and appease President Trump who has been calling for lower interest rates for some time).

Global developed market returns were mixed in February as political uncertainties in the US forced investors to shift capital to regions with better valuations and less volatile leadership. The MSCI World Index declined 0.7%, led by losses in consumer discretionary and communication services stocks, especially in the US. European markets led gains for the second consecutive month with Germany’s DAX up 3.8% for the month as investor sentiment improved following recent elections. The US’ S&P 500 declined 1.3% in February as investors worried about the impact of tariffs on consumption and heightened competition on the profitability of US technology stocks. The S&P 500 Consumer Discretionary sector declined 9% as the Federal Reserve indicated that interest rates were likely to stay higher for longer as inflation remained elevated. Emerging markets gained 0.5% thanks to large gains in China and Eastern Europe. The Chinese stock market surged 12% as capital flowed back into the region after the government met with high profile business leaders and pledged greater private sector support. Large export-led markets, including South Africa, declined sharply as their currencies weakened on tariff threats. Global bonds gained 1.4% in February as yields on developed market government bonds declined on economic growth concerns, while global property stocks gained 2.9% as investors optimistically priced in lower interest rates.

In South Africa, the failed budget took centre stage as opposition parties rejected the ANC’s surprise proposal to increase VAT by 2% and suggested the focus should rather be on cutting wasteful expenditure. Investors were reminded of the country’s high debt-to- GDP ratio of 75.4% and the high cost of servicing the debt burden (21% of annual GDP), as well as the fact that due to the country having income tax rates in line with the wealthiest developed markets, households now pay more than double the income tax that corporates pay (up from a roughly equal split a few years ago). The opposition noted that the country does not have a revenue problem but has a problem allocating capital to programs that drive growth and job creation. Aside from the failed budget and increasing tensions with the US over land expropriation and geopolitical matters, there have been some positive developments. Growth is expected to recover off a low base, inflation is expected to remain below the midpoint of the SARB’s target band, and the country’s sovereign credit rating is expected to remain stable with a possible removal from the FATF grey list on the horizon.

Local equity markets followed export-led emerging markets lower, and sentiment was further eroded by the political tensions between South Africa and the US. The All Share Index was flat for the month as the 2.8% gain in Industrials stocks offset the 7% decline in resources stocks. Financials stocks added 0.8% thanks largely to gains in insurers. Industrial stocks were supported by the 12% gain in Naspers and a 20% gain in brewer AB-InBev while a sharp decline in platinum, gold and coal stocks led the resources sector lower. The rand strengthened through the month despite the failed Budget speech but weakened slightly at month end as investor sentiment waned on the back of rising political tensions. Local bonds gained 0.1% for the month as yields rose amid concerns around the stability of the GNU. Listed property stocks shed 0.3% as slightly higher funding costs and the unexpected return of loadshedding overshadowed improving growth prospects.