Investment strategy

Legal Provident Fund offers members a lifestage model default strategy as well as individual choice portfolios. The fund’s assets are managed by Investment Solutions. For more information about Investment Solutions or the fund’s portfolios please visit www.investmentsolutions.co.za

Lifestage model

Given that not all members are comfortable with making investment choices, the trustees have decided to offer a range of portfolios, which are combined to provide a suitable default investment strategy known as the lifestage model. This model places members in appropriate portfolios or a combination of portfolios based on their number of years to retirement.

The underlying portfolios used are as follows:

PortfolioRisk profileAim
IS PerformerHigh / MediumTo blend investment managers to achieve superior returns at average risk.
IS Real Return FocusMedium / LowTo provide a gross return of above inflation over every rolling three years and to protect capital over a rolling 12 months.
IS BankerNoneTo provide an investment return above the average of money –market portfolios.

The table below shows the full portfolio structure across the lifestage model effective from 1 July 2016, comprising of different allocations to Investment Solution’s Performer, Real Return and Banker. This table shows the “phase-down” methodology towards lower risk portfolios in the lead-up to retirement:

Member investment choice

Members may choose one or a combination of the following portfolios in structuring their own investment strategy:

PortfolioRisk profileAim
IS PerformerHigh / MediumTo blend investment managers to achieve superior returns at average risk.
IS Real Return FocusMedium / LowTo provide a gross return of above inflation over every rolling three years and to protect capital over a rolling 12 months.
IS BankerNoneTo provide an investment return above the average of money –market portfolios.

The investment strategy chosen by the member will not change unless the member chooses to complete a switch form and changes their strategy. Members may switch between portfolios by following the procedures adopted by the fund administrators. (link to switch form). All completed switch forms must be submitted to zzswitches@aforbes.co.za.

Lifestage
model

AgePortfolioAllocation
18 to 55IS Performer100%
56IS Performer
IS Real Return Focus
70%
30%
57IS Performer
IS Real Return Focus
60%
40%
58IS Performer
IS Real Return Focus
50%
50%
59IS Performer
IS Real Return Focus
40%
60%
60IS Performer
IS Real Return Focus
30%
70%
61IS Performer
IS Real Return Focus
20%
80%
62IS Performer
IS Real Return Focus
10%
90%
63IS Real Return Focus
IS Banker
90%
10%
64 onwardsIS Real Return Focus
IS Banker
67%
33%

Investment switches between portfolios are automatic and will take place at the month-end of the month in which a member’s birthday occurs. Member’s existing retirement savings as well as his/her future contributions will be invested in accordance with the default lifestage model.