By Emma Kakololo
WINDHOEK
Old Mutual yesterday launched an addition to its ‘Absolute Growth Portfolios’ range.
The new product, named ‘Smoothed Real Return Investment’ targets institutional investors and explicitly targets returns in excess of Namibian inflation, while smoothing out returns to protect investors from volatility in the market.
The approach, said Chief Executive Corporate, Andrew le Roux, along with a significantly higher exposure to equities and alternative investments than traditional smoothed bonus funds, would enable the portfolios to compete strongly with market-related funds while still offering investors protection from short-term market volatility.”
“Old Mutual is not a company that is mining Namibia, sending the dividends outside the country,” Le Roux said, adding that the new range was the culmination of 40 years of investment experience that the company has with smoothed bonus portfolios and the targeting of real returns.
“We really believe that our customers would be happy and hope to give them the best deal we can.”
Announcing the new product yesterday, Le Roux said that the Absolute Growth Portfolios address past concerns about levels of transparency and disclosure within traditional smoothed bonus portfolios.
“Investors will be able to determine their expected monthly investment gains, typically referred to as ‘bonuses’, in advance thanks to the fully disclosed bonus declaration process.”
Furthermore, he said, all charges and fees would be fully disclosed and retirement fund members would have the benefit to have a greater understanding of their investments and how returns are generated.
The Absolute Growth Portfolios range offers three options with different risk-return profiles. The Absolute Secure Growth portfolio has a growth objective of Consumer Price Index (CPI) (the inflation rate) plus 2.5 percent per annum over three year rolling periods and offers a 100 percent guarantee. The Absolute Stable Growth portfolio targets CPI plus 4.5 percent per annum with an 80 percent guarantee.
The Absolute Smooth Growth portfolio targets CPI plus 5 percent per annum and offers a 50 percent guarantee.
All guarantees apply on benefit payment.
Le Roux stressed the range was suitable for any fund as well as its members that sought growth above inflation over the longer term, exposure to active management, protection against short-term volatility and as an option, comprehensive guarantees.
“Smaller funds that cannot take on a lot of risk or afford to invest in a range of different vehicles should also consider this product as a one-stop-shop.
Large funds are able to use a portfolio such as this as a stable core investment which allows them to maximize their overall returns through other higher risk investments,” he said.