Two new players have entered the smoothed bonus retirement fund market, showing there is still a strong demand for this strategy. As a retirement saver, you can take on higher investment risk with its higher volatility and be rewarded with higher returns because the long time horizon for which you are investing makes it possible to recover from downturns in equity markets. But some retirement fund members are not comfortable with negative returns even if they still have many years before retirement. The trustees of funds serving these members - typically union fund members - often opt for smoothed bonus funds. Traditionally, these have been offered by the larger life companies, Old Mutual, Momentum, Sanlam and Liberty. They combine smoothed returns with guarantees on the capital invested in an attempt to ensure members' returns are always positive. Late last year multimanager 27four partnered with Sanlam Employee Benefits to launch the Progressive Smooth Bonus Fund, the first such f...

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