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Life Assurance
Thursday, April 1, 2010
25-year record

Despite the volatile global markets in the past three years, the Old Mutual Smoothed Bonus Fund has now seen its 25th consecutive year of positive declarations. Its range of smoothed funds have enjoyed positive returns over the last three years of up to 9.8% p.a., which is 4.8% p.a. better than the returns of the most comparable average market-linked fund and 1.5% p.a. above inflation.

“For 2009, Old Mutual declared a total bonus of 7.2% for investors in the retirement portfolio of its Flexi Smoothed Bonus Fund (net of investment fund charges). Long-term growth above inflation creates wealth for our customers. With the Smoothed Bonus Fund giving returns since inception averaging over 5% p.a. more than inflation, there can be little doubt that this fund has helped many investors in building their investment value without incurring undue risk in the process,” says Steven Levin, Executive General Manager - Product Solutions at Old Mutual.
“Smoothed funds are the ideal option for investors who would like exposure to equity markets that achieve higher returns over the longer term, without the inevitable short-term market fluctuations that are associated with the equity market,” says Levin.
Old Mutual’s smoothed funds hold a balanced portfolio of assets, which include South African equities, bonds, property and some international assets.
Old Mutual’s smoothed funds also provide further protection through minimum return guarantees. While investment into a market-related fund without any guarantees has the potential to earn a slightly better long-term return, the price of a higher return is that it comes with more risk and volatility. Smoothed funds therefore provide investors with investment growth and peace of mind.
People who are close to retirement at the time of a market correction and who are heavily exposed to equities might consider postponing their retirement date to ensure that they have enough money to last them through their golden years.
“If you reach retirement age when markets are down, a smoothed fund investment offers you a level of protection when exiting the fund that is unavailable to investors in directly market-linked funds. Furthermore, the fund continues to deliver outstanding returns in the current market conditions, giving investors real peace of mind,” concludes Levin.
 

Copyright © Insurance Times and Investments® Vol:23.4 1st April, 2010
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