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10X Retirement Annuity
Type of RA: 10X offers only the new-generation (unitised) RA.
Investment strategy: The 10X RA offers just one optimal portfolio. This portfolio is fully diversified across asset classes, securities, countries and currencies and adjusts automatically to your age and investment time horizon. 10X uses index funds.
Fund performance: the 10X High Equity Fund, owned by more than 90% of 10X investors, returned 12,3% pa for the five years ended 31 May 2017, after fees (assuming a 1,04% pa fee).
Fees: The 10X RA charges just one investment management fee. The maximum investment fee is 1,04%. The TER (total expense ratio), which includes trading costs is 1,20%. The 10X reported returns are net of these trading costs. The investment fee drops to 0,8% pa on amounts above R1m and to 0,57% pa on amounts above R5m. 10X does not charge admin, initial, exit or performance fees.
Advisor: You have the option to invest directly online, or you can engage an adviser. You can negotiate a maximum advisor fee up to 1,14% pa.
Contributions: The minimum contribution (monthly or ad hoc) is R1,000, and the minimum lump sum investment is R12,000.
Variation charges: none.
Old Mutual RA
Type of RA: Old Mutual offers both the traditional policy-based RAs as well as new-generation (unitised) RA. You need to contact an advisor, for a formal quote on the former. The information below refers to their unit-trust based RA which you can purchase online.
Investment strategy: You have access to the full range of Old Mutual unit trust funds of +/- 40 funds). The list includes balanced (multi-asset) funds catering for all risk preferences as well as specialist sector and asset class funds, as well as outside funds. The funds are, for the most part, actively managed but the line-up includes some index funds.
Fund performance: The most apt comparison to the 10X High Equity Fund is the Old Mutual Flexible Fund. The return for the A Class shares (for individual investors) for the seven years ended 31 May 2017 was 11,7%, after fees. The 12m total investment charge for this investment was 1,83%.
Fees: The TER varies per fund. The average charge is around 1,65% pa with a median charge of 1,6% pa. The minimum charge is 0,47% pa (for a money market fund) with a maximum of 3,61% pa for a Multi-Manager Aggressive Balanced Fund-of-funds.
No admin fee is charged unless the contribution is below the prescribed minimum of R500 pm.
Advisor: You have the option to invest directly online, or to engage an advisor. You can negotiate a maximum advisor fee up to 1,14% pa. The Old Mutual RA permits an initial fee of up to 3,42%.
Minimum contributions: R500 (monthly or ad hoc), with a minimum lump sum contribution R10,000.
Variation charges: None.
Source: 10X Investments; 10X Investment Report May 2017; Old Mutual (www.oldmutual.co.za); https://www.oldmutual.co.za/docs/default-source/unit-trust/ut08factsheets/OldMutualFlexibleFund.pdf>Old Mutual Flexible Fund Fact Sheet May 2017. Information sourced on 28 June 2017.
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