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: Aug 2024

Another month of two halves saw global markets fall suddenly as a sharply stronger Japanese Yen saw investors unwind the carry trade.
Markets rebounded just as quickly as investors priced in imminent rate cuts and the US’ S&P 500 Index again closed at record highs.

Economic growth in the US in Q2 was revised upward to 3% as consumer spending and business investment was stronger than initially assessed. Consumer spending, which accounts for 70% of US economic activity, rose 2.9% last quarter while business investment surged 7.5%, led by a 10.8% jump in investment in equipment. The latest revision reflects an economy that remains resilient despite the pressure of continued high interest rates. While the sharply weaker non-farm payrolls data for July shocked markets with job growth of just 114000, the labour market has been gradually weakening, with the unemployment rate rising for four consecutive months to 4.3%. While this is still low, job openings and the pace of hiring have also dropped, though they remain at relatively robust levels. With the Federal Reserve’s preferred measure of inflation slowing to 2.6% year-on-year in July, the only question now is whether the Fed will cut rates by 0.25% or 0.5% at their September meeting as the Fed is expected to shift focus from fighting inflation to supporting the economy.

The violent unwinding of the carry trade – buying assets using low-yielding foreign currency – thanks to a suddenly strong Japanese Yen caused the largest daily drop in Japan’s TOPIX (-12%) since 1987. This, together with weaker-than-expected July US employment data, caused the largest surge in the CBOE Volatility Index (VIX) since the COVID crash, prompting even respected commentators to urge the Federal Reserve to implement emergency rate cuts to stabilise the economy and markets. Panic however was short-lived as Federal Reserve Governors noted that while the labour market was slowing, the numbers were not yet recessionary. The MSCI World Index recovered from the early sell-off to end the month with a gain of 2.7%, driven by gains in interest-rate sensitive sectors like financials and consumer staples. The US’ S&P 500 gained 2.4% to close at a record high while the tech-heavy NASDAQ gained 1.2% for the month as investors questioned the ability of technology companies to continue growing profits at current rates in a slowing growth environment. Emerging markets lagged developed markets in August with gains of 1.6% as gains in Thailand, Indonesia and Argentina were dampened by losses in Mexico and Turkey. Chinese markets lagged as growth expectations slowed. Global bonds rallied 2.4% in August as the yield on developed market government bonds dropped sharply on expectations of imminent rate cuts. Global property stocks surged 6.7% as the sector priced in an imminent reduction in interest rates in the US and a stable growth outlook.

In South Africa, prices rose 0.4% in July and annual inflation dipped to 4.6% (from 5.1% in June) as administered prices rose less than a year earlier. Producer prices dipped by 0.2%, with the annual rate of 4.2% suggesting that consumer prices should fall further in coming months as input prices continue to decline thanks to a stronger currency. Retail sales growth surged to a two-year high in June, with consumption increasing 4.1% from a year earlier, as a rise in consumer confidence saw increases in clothing purchases and sales at general dealers. Dwindling savings rates and an increase in the use of loan sharks as banks tighten lending standards is however a worrying trend. On the production side, manufacturing production declined 0.5% in June for an annual drop of 5.2% as the production of vehicles and components, metal products and machinery and food and beverages slowed from a year earlier. These same three categories however were the largest contributors to growth in Q2, suggesting that the improved electricity outlook and better performance from Transnet and the ports should continue to boost production and exports. With inflation now very close to the midpoint of the SARB’s target band and expected to decline further, and the US signalling imminent rate cuts, the Monetary Policy Committee is widely expected to cut local interest rates by at least 0.25% at the September MPC meeting.

Local markets eked out gains of 1.3% in August as the stronger rand weighed on rand-hedge stocks and a slowing global growth outlook weighed on commodity companies. Gains were driven by domestic-oriented interest-rate sensitive stocks like financials (+5.7%) and retailers (+6%) as well as gains of 4% from Naspers. Resources stocks shed 10% as commodity prices declined. The rand strengthened as sentiment continued to improve and ended the month at R17.83 to the dollar. Local bond yields continued to fall as the currency gained and global yields declined. The All Bond Index gained 2.4% for the month as yields on the longer end of the curve fell sharply on the back of an improving inflation outlook. Listed property stocks meanwhile jumped 8.3% as the domestic economic outlook improved.