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 40 years 100% invested in the Aggressive Portfolio
40 to 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:

  • Aggressive Portfolio –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. The trustees target an annual return of inflation +6%
  • Growth Portfolio –  The goal is to achieve, as with the aggressive portfolio the best possible long-term returns, but with slightly less risk associated to the portfolio. As a result the investment target is also slightly lower at inflation +4,5%.
  • Moderate Portfolio – The goal of this portfolio is to provide members with more stability in their investments returns. The Trustees target an annual return of inflation +3%. In the past this option was only available to members older than 50, but the Trustees made the decision to make the Moderate Portfolio also available to members under the age of 50. It is important to note that if you are under the age of 50, this option will only be available on an exceptional basis and provided that a justifiable reason together with confirmation of the advice you have received from your financial advisor.
  • Shariáh Portfolio – This option is tailored for members that prefer their investments to meet the requirements of the 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 Aggressive, Growth, Moderate or Shari’ah Portfolios.

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: have the abovementioned investment options as well as the following portfolio:

  • Money Market Portfolio – Capital preservation is the main goal of this portfolio and can only be considered by members from the age of 50.

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.

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

How will my future contributions be allocated? All contributions will be allocated according to your investment splits. For example, if you are invested 25% Growth, 25% Aggressive and 50% Moderate, your contributions will be divided 25%, 25% and 50% between the selected portfolios respectively.

Remember this!

  • If you choose to make your own investment choices within the available investment option, you must obtain financial advice.
  • If you don’t have a financial advisor please contact our member centre on 0861 273 863 who will refer you to Portfolium, the Fund’s appointed financial advisors for assistance.
  • All CRF Members have access to two free investment switches within a financial year (1 July to 30 June).
  • Effective 1 July 2022 a third switch is allowed, subject to a fee of R350.00. Should you apply for an additional switch within the financial year, you will need to provide a valid reason for the switch request which is subject to approval by the Principal Executive Officer of the Fund. In cases where a third switch is requested, the Fund’s administration will also refer the advice records to Portfolium to review. In the event of any gaps being identified in the advice that was provided, the feedback would be referred to you for further engagement with your financial advisor.
  • Your request to change your investment option will be actioned within 10 working days from the receipt of your completed investment option switch form, using your latest available member share and unit price.
  • All switch forms must be signed off by a Financial Advisor which the Investment Switch Form makes special provision for. Please ensure you make use of the latest available form on the Fund’s website.
  • If you become a deferred member of the CRF, the abovementioned investment options will remain available to you.

Your investment strategy is unique and should be done in line with your overall retirement plan. Don’t delay, plan for a better future today and let the Fund’s appointed financial advisors Portfolium guide you on your retirement journey.

A summary of the different investment portfolios

Investment Portfolio Notes on eligibility Goal and degree of Risk Annual return target *
Aggressive Portfolio Available to all CRF members 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 with the aggressive portfolio the best p8*+possible long-term returns, but with slightly less risk associated to the portfolio. CPI +4,5%
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 Goal: is to provide members with more stability in their investments returns. CPI + 3%
Money Market Portfolio Available to all CRF members from the age of 50 years. Goal: capital preservation CPI

* CPI stands for Consumer Price Index