Low equity funds should be the choice for the conservative investor. They aren’t as exposed to a crash in the equity market as a balanced fund, as they are limited to a 40% equity allocation. And they will provide at least some real growth, which is not available from a money market fund.

But recently investors have lost confidence in equity markets, which have battled to provide real returns. Over the past year R12.4bn has been pulled out of low equity or stable funds and almost R57bn has been invested in multi-asset income funds. These differ from the traditional income funds as they can invest up to 10% in equity and up to 25% in property, and in classes such as preference shares. Unlike income funds they have no maximum duration...

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