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Investment Strategy
Friday, February 1, 2002
Portfolio selection

A new investment exchange offers retirement fund managers a direct, single point of access to a wide range of South Africa’s investment managers and portfolios.

Called Portfolio Selections the exchange should help retirement fund trustees meet the growing demand from members for suitable investment strategies, competitive returns, and greater transparency in costs and reporting.
These improved standards will have to be met when Regulation 28 of the Pension Funds Act is revised. Trustees will soon have to invest funds’ assets according to well-planned investment strategies appropriate to members’ different needs.
“The traditional approach of one-size-fits-all is no longer being tolerated by members, administrators, and now regulators,” says Gavin Williams, CEO of Ten50Six retirement fund administrators, which launched Portfolio Selections. “The existing regulation is ineffective because it does not provide a guide for trustees on whether an investment strategy is appropriate, but focuses more on setting limits on the types of investments that may be made. Trustees can adopt a completely inappropriate investment strategy provided the limits are not exceeded. This is now changing.
“The revised regulation will encourage trustees to consider investment risks and develop a prudent overall philosophy for investing fund assets. Individual investment choice will have to be addressed. Performance of the investment manager will be monitored and strategies will be reviewed if results are not acceptable.”  Portfolio Selections will help fund administrators comply with the new regulation in several ways:
• It offers access to a range of appropriate and diversified investment options
• Provides the ability to split funds across investment portfolios
• Updates investment records on a daily basis
• Provides real-time consolidated reporting via the Internet, across investment options
• There is no additional cost to the standard investment manager fees
• It allows investment strategies to be customised and implemented at a fund, lifestage-band or individual member level
• The Portfolio Selections Profiled Funds provide the industry return for a particular risk profile.

Portfolio Selections offers direct access to pooled portfolios, multi-manager portfolios, profiled portfolios, fully vesting guaranteed funds, and money market portfolios. Offerings can be accessed from investment managers such as African Harvest, Allan Gray, BoE, Coronation, Investec, Liberty, Metropolitan, Old Mutual, RMB, and Sanlam. Ten50Six intends expanding this range of investment managers in due course.
Ten50Six was launched in July 1999 by a team of highly qualified, experienced professionals with extensive experience in asset management, unit trust and pension fund administration. It is 55% held by African Merchant Bank and 45% owned by directors and management. The company specialises in providing retirement fund investment record keeping and related services to retirement funds, assurance companies, parastatals and other relevant parties.
Ten50Six focuses solely on providing professional administration services and is totally independent of appointments in the areas of actuarial, investment and benefit consulting.

Copyright © Insurance Times and Investments® Vol:15.1 1st February, 2002
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