CRF Investment Strategy explained:

The Consolidated Retirement Fund follows a strategy of unitisation, which allows the CRF to calculate your returns daily. This ensures that your investments are managed with complete transparency, and if you wish, you can monitor your Fund value on a daily basis!

How does Unitisation work?

When we receive monthly contributions, comprising yours and the employers, after verifying receipt and allocating the total to your record, the Fund will invest the contribution. The contribution will first be converted into units which are linked to a unit price. The number of units allocated to your member share will depend on the unit price on the day of investment.

The number of units in your member account will remain constant throughout the given month and the daily value of your member share is calculated by multiplying the number of units in your account by the unit price on that particular day.

Remember, you carry the investment risk. So, depending on the performance of your investment portfolios, the unit prices go up and down and hence your member share value will show a daily increase or decrease.

How are my investments protected if I carry the investment risk?

The investment of the assets of the Fund is one of the most critical of all the management functions carried out by the Board of Trustees. Regulation 28 of the Pension Funds Act provides guidelines and limits on the investments of retirement funds. This is to protect funds against making irresponsible investments. The CRF is fully compliant, ensuring your investments are managed properly. The Fund follows an active hedging strategy to manage the downside risks and to protect you from extreme drops in the market.

Do I have a say when it comes to how my retirement savings are invested?

Yes – the CRF offers a variety of investment options to assist our members with their retirement planning. These options cater essentially for the time of life that you are at, and which investments and acceptable risks are appropriate.

CRF Life Stage Investment Strategy

Introduced in July 2019, the Life Stage Investment Strategy is available to all CRF members who prefer not to make their own individual investment choices. The aim of the Life Stage Investment Strategy is to minimise your investment risk according to your age and closeness to retirement. The closer to retirement, the more important it becomes to be invested in lower-risk investment portfolios, to safeguard against market volatility that could adversely affect your savings.

Your Fund value will be invested as follows, based on age:

Your Age

CRF Life Stage Investment Strategy – Investment allocation

Under 55 years

100% invested in the Growth Portfolio

55 to 60 years

50% in the Growth Portfolio and 50% in the Moderate Portfolio

60 years and older

100% invested in the Moderate Portfolio

The Life Stage Investment Strategy is the default investment strategy for all members, but if you prefer to opt out and make your own investment choices, please submit an Investment Switch form.

What are the options available if I wish to make my own investment choice?

If you are under the age of 50, the following investment options are available to you:

  • Growth Portfolio: The long-term goal is to achieve as stable as possible returns, outperforming inflation. The Trustees target an annual return of inflation +4%.
  • Aggressive Portfolio – please note this option is only available from 1 November 2019. You’ll need to obtain financial advice, before selecting this option. The goal of this portfolio is to reach the best possible growth over the long term and is best suited to members who have many years left before retirement. This portfolio can be extremely volatile over the short term due to its high equity exposure.
  • Shariáh Portfolio: This option is tailored for members that prefer their investments to meet the requirements of Shari’ah law and the principles articulated for “Islamic finance”.

You can choose to invest your retirement savings between the investment options as listed above.

Example 1:

100% in the Growth Portfolio

100% in the Aggressive Portfolio

100% in the Shariáh Portfolio

You can choose a split between the available investment options in increments of 25%. Please note that the split must add up to 100% in total:

Example 1:           75% in the Growth Portfolio and 25% in the Aggressive Portfolio

Example 2:           50% in the Growth Portfolio and 50% in the Aggressive Portfolio

Members 50 years and older: can still select any of the investment portfolios above. However, as you get closer to retirement, you may well wish to protect your retirement benefit to invest all or a portion of it in a less aggressive investment portfolio. This will aid in protecting your benefit from adverse market volatility. To assist with this, the following additional investment options become available:

  • Moderate Portfolio: can be considered by members nearing retirement (from age 50) who would like more stability in their investment returns. Stability is achieved by investing partially in a smoothing strategy, where a reserve is used to absorb negative returns should the markets become very volatile.
  • Money Market Portfolio: You’ll need to obtain financial advice, before selecting this option, which should only be considered when very close to retirement and your primary objective is to protect what you have already saved in the Fund. Capital preservation is the main goal of this portfolio.

Remember, you can split your investment between the available portfolios in increments of 25%.

Members 50 years and older have the following investment options:

If you would like to make your own investment choice, but you have not received financial advice, you may choose one of the following combinations:

  • 100% Growth Portfolio
  • 100% Moderate Portfolio
  • 100% Shariáh Portfolio
  • 25% Growth Portfolio and 75% Moderate Portfolio
  • 50% Growth Portfolio and 50% Moderate Portfolio
  • 75% Growth Portfolio and 25% Moderate Portfolio

If you would like to make your own investment choice, and you have received financial advice, you must indicate this by ticking the tick-box on the Investment Option Switch Form. Please consult an accredited Financial Advisor. Then, you may choose between the following combinations in increments of 25%:

  • Growth Portfolio
  • Moderate Portfolio
  • Money Market Portfolio
  • Aggressive Portfolio

Example 1:    50% in the Growth, 25% in the Moderate, and 25% in the Aggressive Portfolio

Example 2:    25% in the Growth, 25% in the Moderate, and 25% in the Money Market Portfolio

How will my future contributions be allocated?

From September 2019 contributions will be allocated according to your investment splits. For example, if you are invested 25% Growth, 25% Money Market and 50% Moderate, your contributions will be divided 25%, 25% and 50% between the selected portfolios respectively.

How often may I switch between the available Investment Options?

You are allowed two switches at any time during a financial year (1 July – 30 June 2019).

When will my new investment switch be implemented?

Investment switches are implemented within 10 working days after the switch instruction is received by the administrator.

A summary of the different investment portfolios

Investment Portfolio

Notes on eligibility

Goal and degree of Risk

Annual return target *

Aggressive Portfolio

Available from 1 November 2019. Financial Advice must first be obtained.

Goal: to reach the best possible growth over the long term.

Risk: can be extremely volatile over the short term.

CPI + 6%

Growth Portfolio

Available to all CRF members

Goal: to achieve as stable as possible returns and to outperform inflation.

Risk: can be volatile over the short term.

CPI +4%

Shariáh Portfolio

Available to all CRF members that prefer their investments to meet the requirements of Shari’ah law

Goal: to reach the best possible growth under the Shariáh law and the principles articulated for “Islamic finance”.

CPI +4%

Moderate Portfolio

Available to all CRF members from the age of 50 years

Goal: to offer more stability in returns when nearing retirement.

CPI + 3%

Money Market Portfolio

Available to all CRF members from the age of 50 years. Financial Advice must first be obtained.

Goal: capital preservation is the main aim.

CPI

* CPI stands for Consumer Price Index

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