Understanding the investment options in the Allan Gray Umbrella Retirement Fund
The Allan Gray Umbrella Retirement Fund offers two trustee-approved default investment strategies:
- Allan Gray default investment strategy
- Multi-manager default investment strategy
You must choose one of these options as the default investment strategy into which your employees’ contributions will automatically be invested. Employees can opt out of the default strategy. In this case, they must choose from one of the options described below.
You may be interested in reviewing the Umbrella Fund Default Investments Survey. Sponsored and initiated by Allan Gray, this survey is produced by independent advisory company GraySwan. It is an independent, factual report designed to help you make quick and easy comparisons of default investment strategies across multiple umbrella fund providers in South Africa. You can download a copy of the latest available survey here.
Appropriate investments for employees’ stage of life
The default investment strategies are designed to automatically transition employees’ retirement savings into portfolios that are appropriate for the number of years they have until they reach retirement (their investment horizon).
Younger employees, who have a longer savings time horizon, are invested in portfolios with greater exposure to growth assets, which will provide the best opportunity for their assets to grow over the long term, and have ample time to recover if there is a downturn.
Employees who are closer to retirement are invested in lower-risk portfolios to reduce the risk of permanently losing money.
The table explains this process in more detail. No action is required for employees to benefit from this approach.
Choice at no additional cost
Your employees can opt out of your chosen default investment strategy if they want to. They must then choose from one of the options described below.
They can also opt out of life-staging if they do not want their savings automatically transitioned from one portfolio to another in the three years preceding retirement.
They can opt back into the default investment strategy and life-staging at any point in time.
Please refer your employees to the latest Member information booklet for more detailed information.