With R480bn under management, the multi-asset high-equity sector is the largest sector in the industry, larger even than money market funds, or equity funds. High-equity funds used to be called balanced funds, and indeed many still have the word "balanced" in their names. These funds are designed to provide the best possible long-term total return for investors building a nest egg for their pensions. To qualify for the generous tax breaks available for pension funds and retirement annuities, investors cannot invest 100% into an equity fund. But under regulation 28 of the Pension Funds Act, they can invest up to 75% in equities and balanced funds are the ideal vehicle for this. And there is plenty of scope for diversification as 30% of the assets can be invested offshore, and a further 10% in the rest of Africa. These funds have a long history — Allan Gray Balanced is coming up to 20 years, Sanlam, Old Mutual and Stanlib closer to 25. Even the newcomer RECM Balanced is coming up for ...

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