Please contact SWIP Client Service on 087 365 4888 or swipclientservice@sasfin.com.

Please contact SWIP Client Service on 087 365 4888 or swipclientservice@sasfin.com.

Yes, please contact our SWIP Client Service Desk on swipclientservice@sasfin.com who would gladly assist in arranging the transfer.

• We take your investment time horizon, risk preference and personal goals and tailor a bespoke solution for you using listed index trackers or exchange traded funds (ETFs)
• We use sophisticated portfolio optimisation modelling to determine the optimal asset allocation for you
• We constantly update our models and rebalance your portfolio, which you can monitor online
• We track your portfolio against your goals and review this and your risk strategy with you at least annually
• Exposure to global markets is an important part of the solution

All fees are quoted excluding VAT

The Exchange-Traded-Funds (ETFs) we invest in on behalf of our clients when constructing and managing their investments, have internal fees over and above SWIP's fees. These fees are a major consideration in the selection process of the most appropriate ETFs. The majority of the portfolio is constructed using ETFs with total expenses ranging from 0.10% to 0.35% of fund value. Some of the more specialised ETFs can be more expensive. We assume an average fee of 0.25% in all our calculations.

No additional custody fees are charged for assets held locally. A small custody fee is charged by our offshore platform for assets held offshore.

Minimum investments

• monthly contribution of R1,000; or
• an annual contribution of 12,000; or
• a once-off lump sum of R50,000

A smaller initial lump sum can be made as long as the ongoing contribution minimums are met.

These minimums are per investment account. An additional admin fee of R25 per month will be charged on any accounts not meeting the minimums.

Selecting a risk strategy that best suites you is an important part of your retirement savings and investment strategy. The higher your risk level, the bigger your potential gains but also your potential losses. Taking risk over the long term is critical to increasing investment returns and reaching your investment goals.

Generally speaking, the longer you intend investing your money, the more risk you are able to take. This is because both your chance of losing money and the volatility of your returns reduces the longer you hold an investment. Over a long period of time the years in which your returns are poor can be offset by the years in which the returns are very good.

This does not mean that you cannot take risk closer to retirement, or during retirement for that matter. We are living longer and longer making it necessary to take risk in order to achieve returns.

The chart below shows the typical range of possible investment gains and losses per year by risk strategy. During our online process, you will be asked to select a risk strategy that best suits you. The pink marks show the expected average yearly return per risk strategy. The vertical lines on represent the likely range of possible returns around this average every year.

We always take into account how long you intend investing for when selecting the right investments for you. The “aggressive” risk strategy we implement for someone in their 20s is quite different from that of someone at or after retirement. So what we are trying to establish is how much risk you are willing to take over a long period of time for an expected level of reward, in the form of investment returns.

Some descriptions to guide you:

• Aggressive risk strategy - you are looking to maximise returns and understand that there will be times when your portfolio will suffer losses (sometimes substantial losses). However, you also expect years where you'll make substantial returns to more than offset any loss making periods. It is highly unlikely but not impossible that at the end of your investment period you'll suffer a loss.
• Moderate Risk Strategy - you are looking for moderate returns and understand that you are likely to experience losses at times, but are uncomfortable with these being substantial (although there is still a possibility). As with an aggressive strategy, there will be years of strong returns but to a lesser extent.
• Conservative Risk Strategy - You would rather have much lower returns that at times may not even beat inflation because you are more concerned with minimising your chances of making any losses. This is not a common long term investment strategy and can seriously jeopardise your ability of attaining your long term investment goals.

We encourage you to see what the impact of choosing different risk strategies is on both the size of your expected level on return and on the variability of that level of return. You will be given an opportunity to do this as one of the steps in our online process.

We review your choice of risk strategy with you at least once a year to ensure it is still relevant to your current circumstances. Over and above this, we will gather additional information from you as you approach retirement and adjust your investment and risk strategy accordingly. Your investment and risk strategy leading up to and at retirement is largely dependent on your income needs as a percentage of your portfolio value at the time.

We take your unique personal situation and preferences to determine the appropriate mix of asset classes for you (e.g. shares vs bonds vs property etc) to reach your financial goal. We use extensive actuarial modelling to determine the optimal asset allocation for each individual’s financial goal. The portfolio is then managed in your own personal portfolio; using listed exchange-traded-funds (ETFs).

At SWIP, our guiding philosophy is to empower financial well-being. That means we want to help you to understand enough about investing to make the right decisions with your money. We've therefore tried our best to make the following explanation something that everyone can understand. Before we go into the mechanics of how we choose the best investments for you,
it is useful to understand some of the key concepts we take into account.

The basic approach to choosing the best investment portfolio is to compare different portfolios based on their expected "risk" and "reward".

The "risk" is a measure of how different the actual earned return could be to what is expected. There are different metrics that are used when measuring risk. The three most important aspects of risk that we consider are:

• the volatility, which is an indication of how much the value of an investment may go up or down over time. An investment with a high volatility could give very good returns, but could also lose its value. The higher the volatility the wider the range of your overall returns over your investment period.
• loss aversion, meaning that you hate losing more than you like winning. When applying this to investments the risk of making a very large loss outweighs the potential for making an equally large profit. When faced with a choice you would rather accept a smaller potential upside to avoid a large downside.
• we encourage investors to take a long term view on investment and therefore risk. Risk is an important part of any investment portfolio and it is often difficult to meet your objectives without taking on some risk. Day-to-day changes to the value of your investment are less important than what happens over the entire period of your investment. Often these daily changes offset each other, and when looked at over several years the overall impact tends to be far less dramatic.

The "reward" is the investment return the portfolio is expected to earn, and is expressed as the percentage return over a year. It is often useful to adjust this return for inflation ("CPI"). A return of 10% when inflation is 12% means that, in terms of your buying power, your investment is worth 2% less. For long-term savings, investments that give returns linked to inflation are preferred, and so we always take inflation into account when considering the returns on different portfolios.

Your chance of losing money and the volatility of annualised returns, reduces the longer you hold an investment

The risk and return characteristics for two common investments are shown below:

• Cash: The returns for cash tend to be quite stable over short periods (up to a year) and so it has a very low volatility. In addition, the risk of your cash losing money is very low, as the government generally guarantees any cash deposited with a bank. Overall cash is one of the least risky assets. However, cash also gives a low average returns compared to other investments. The current return on cash is around 6%
• Equity also known as shares: Equities have a high volatility compared to many other types of investments, and the value can change dramatically over a year, both up and down. To compensate for this higher risk, the average return on equities over a long period of time (over five years) tends to be higher than many other investments and so they are a valuable part of any long term portfolio. However, there is always a (generally small) risk that your investment could lose value, even over many years. The current long term expected return for equity per year is around 12%.

Asset classes
Annual returns

The annual returns on the different types of assets over 19 years. The chart clearly shows how the returns for certain asset types are more volatile than for others

The best (or "optimal") portfolio is the one that gives the highest return for a specific level of risk. In other words, if you have two portfolios that have the same level of risk then the optimal portfolio is the one that has the highest expected return.

Not all assets are created equal.

The different types of assets that you can invest in have different risk characteristics, including:

• Volatility of returns: this is an indicator of how much the value of an asset may go up or down over time. The higher the volatility the wider the range of your overall returns over your investment period. Typically, the volatility of annualised returns reduces the longer you invest your money.
• Inflation protection: Some assets give returns that change in line with inflation. For some assets, such as CPI-linked bonds, the change is linked directly to actual inflation, whereas for others, such as equities, the link is not as strong and often only seen when looking at returns over 3 to 5 years.
• Currency risk: Investing in assets priced in something other than Rands means that the value of your investment is affected by the exchange rate. This is a good thing if what you want to spend your money on is similarly affected by the exchange rate, but can be a big risk if this isn't the case. For most people a portion of what they spend their money on is affected by the exchange rate (such as the petrol price and the cost of imported goods).

This table gives a high level summary of the types of risk different assets face. In some cases the risk is dependent on the exact asset you invest in, or dependent on your personal investment needs.

Don't put all of your eggs in one basket

Diversification means spreading your investments across different types of asset as well as across different investments within each type of asset. For example, in a year in which the stock market performs poorly and most of your equity investments lose value, you may find that the bond market has performed well. By splitting your investments between equities and bonds you will have been able to offset the good returns from bonds against the poor returns from equities. The result is lower volatility across the portfolio. The same thing happens within each type of asset. A portfolio which only invests in a single equity has a much higher volatility than a portfolio that invests in fifty different equities across several different industries. The great thing about diversification within a particular type of asset is that even though it results in a lower risk, the average expected long term return is not impacted.

Understanding all the options

Using a variety of analytical methods and market information we determine the long term expected risk and return characteristics of each type of asset. When we say long term, we are normally referring to a period of more than 5 years. Our focus when measuring risk is on potential losses.

Choosing the best combination

We use a variety of optimisation techniques to find out what mix of the different types of asset gives the highest expected return taking into account both your risk strategy and the length of time the money is expected to be invested. The percentage to be invested in each type of asset is managed in a range rather than a specific point in order to avoid the costs of having to regularly buy and sell assets based on small market movements. For example, the optimal portfolio for a moderate risk strategy aims to provide a return of 5.5% above inflation over time and, at the time of writing, is split between the different asset classes as shown on the right

This includes analysing past returns and the volatility of these returns, the size and frequency of the largest drops in value and the correlation between the returns. The correlation measures how closely returns in one type of asset match returns in another type of asset. This correlation is an important factor in calculating the overall risk in a portfolio made up of different types of assets.

Keeping everything up to date

The investment market is constantly changing in response to underlying economic conditions, the political situation, and the types of assets that are available. Occasionally this may result in changes to the long term expected risk and return characteristics of the different types of assets. We therefore continually monitor the environment and when required go through the entire process of determining the optimal portfolio and making changes where necessary. We also rebalance portfolios back to the long term optimal portfolio when the mix of assets moves outside of our desired range.

Compound interest is a wonderful thing, provided you are the person receiving it and not paying it. In the case of investment fees, you not only pay the annual fee but also lose future investment returns on that money. Over a long period of time, the total cost of even the most innocuous looking fees can become substantial.

The chart below shows the impact of annual fees on the value of an investment of R100,000 held for 20 years. The example assumes a gross annual investment return of 10% i.e. the investment is expected to earn 10% per year less the annual investment fee.

Each line in the chart shows how the investment portfolio is expected to grow over the next 20 years, allowing for fees ranging from 1% to 2.5% per year.

The value of the investment before paying fees would be R675,000 after 20 years. Paying fees of 1% per year would reduce the investment value to R560,000, which is equal to a percentage reduction in value of 16.7%. In comparison, annual fees of 2.5% would reduce the investment value even more to R425,000, i.e. a percentage reduction in value of 36.9%.

Another way of measuring the full cost of fees is to look at the total investment return over 20 years, which would be R460,000 if you pay fees of 1% per year but only R325,000 if you pay fees of 2.5% per year. In other words, if you pay an annual fee of 1% instead of 2.5%, over 20 years the same investment could earn R135,000 more in investment returns. That is a massive 42% increase in investment returns (42% = 135,000/325,000).

As the graph above shows, protecting your wealth from high investment fees is critical in making long term investment decisions. At SWIP we are very aware of this issue and strive to keep your fees as low as we can, while still maintaining the quality and diversity of your investment portfolio.

National Treasury paper on SA Retirement fund fees

The challenge with many retirement funds is that the fees they charge are layered and lack transparency, making them quite complex to estimate. In July 2013, the South African National Treasury issued a paper about “Charges in South African Retirement Funds”. In this paper, they investigated the fees charged by 4 major South African providers of Retirement Annuity Funds and Preservation Funds. For each provider, they estimated the percentage by which fees reduce the value of a portfolio invested for 20 years.

Using the same assumptions as the National Treasury, we used their analysis to estimate the average annual fees charged by these 4 providers. We then compared the results to SWIP’s fees.

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As you can see in the above table, SWIP’s fees compare very favourably to the market. The only market provider that came close to our level of fees, Provider D, is described as “offering no investment choice”. At SWIP, we can offer you the same low fees combined with a range of investment options.

Notes

• National Treasury assumptions:
• Fund returns of 10% per year
• Annual increases in savings of 7% per year
• Total SWIP Fees of 1.1% = 0.5% management fees + 0.35% wrapper fees + 0.25% average ETFs fees

Tax Effectiveness

Taking advantage of tax incentives, like investing in a retirement fund or tax-free savings account, can significantly boost long term investment returns.

Risk and Reward

There are no free lunches in investing. Higer returns are associated with higher risk. What's important is matching your risk strategy with a portfolio that is expected to give you the best return.

Diversification

Don't put all your eggs in one basket. By spreading your inestment across different types of assets and different investments within each type, risk is reduced.

Cost-Effectiveness

High fees can significantly erode long-term investment returns. The effect of higher fees become more pronounced the longer you are investing.

Long-Term Investing

Investment risk decreases the longer you remain invested. Trying to "time" markets by getting in and out typically results in missing important opportunities that contribute to long term performance.

Re-Investing

Income earned on investments through dividends or interest, are important contributors to long-term returns. Re-invest your income as far as possible.

Rebalancing

It is important to re-balance back to your optimal asset allocation from time to time. This keeps your investment in line with your investment objectives.

Sasfin Wealth Investment Platform (Pty) Ltd (FSP 45334) is 100% owned by Sasfin Wealth. Sasfin Wealth has provided tailored global and local investment offerings to private and institutional clients since 1890.

SWIP has also partnered with DMA (previously known as Saxo Capital Markets SA), a leading international trading and custody platform, and Acravest (Pty) Ltd, a licensed Retirement Fund Administrator (License Number 24/424) and an authorised Financial Services Provider (FSP 43176) in delivering our solutions and ensuring the safe guarding of our clients assets.

Financial wellbeing is not about how much you earn, it’s about how much you can save.

The average working person today will live almost as long during retirement as their entire working life. We don't believe people will truly retire anymore, many will go onto new adventures or "careers" focussing on something important or meaningful. Nonetheless, to take advantage of this longevity you would, as a rule of thumb, need at least between 60% & 80% of your salary today, after adjusting for rising prices (inflation).

One of the most powerful things you can do is take advantage of investment account types like retirement annuities or the new Tax-free savings accounts designed to encourage people like yourself to save, through various tax benefits.

We realised that to empower financial wellbeing for more people, we needed to provide a fully electronic retirement savings and investment portfolio solution online. From the initial engagement and becoming a client, to the ongoing management of your investments, we needed online tools that were straightforward to understand and use, while not diluting our ability to cater to each individuals bespoke investment goals.

These online retirement and investment tools are available and cost free for you to access before having to make a decision on whether SWIP is the right fit for you

We built our technology with your experience as a client in mind. We want you to do things in your own time, online, without having to go into any branch and as far as possible, not even print one piece of paper.

We leverage some of the cutting edge technologies and service providers globally. We have combined this with our own proprietary technology to create a seamless end-to-end client experience and we will never be done building it.