A retirement solution that changes as you do

As we grow, our needs change. Be it buying a bigger house to accommodate an expanding family, or changing our career path to suit our changing interests, our most important decisions always depend on who we are and where we are at in our lives. While many people understand this in relation to career and lifestyle, few people are aware of the fact that their investment portfolio needs to demonstrate similar flexibility. Simply speaking, your portfolio should reflect your life stage in order to make the most of the time you have available.

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Unfortunately, for the average investor, the investing industry can be confusing at the best times and at worst, misleading. The industry offers a ridiculous amount of investment choice – for instance, there are more than 1,400 unit trusts in South Africa. So how do you as an investor make the right decisions about how to invest given your life stage?

Most people pay advisors to make these decision for them. Not only does this add costs, but often the advisors make poor investment choices that further erode their clients’ overall returns.

The result for investors is a catch-22 situation. On the one hand they need an appropriate portfolio, but on the other hand they feel ill-equipped at exercising the choice necessary to make this happen.

At 10X we have a simple solution for this: the 10X Automated Glidepath. Instead of bombarding you with hundreds of choices, we provide you with one simple solution: we invest your money according to your investment time horizon.

By understanding how far away you are from drawing an income from your retirement savings, we bias your savings towards either growth or defensive assets.

Growth Assets

Growth assets are designed for, well, growth, and include investments such as shares and property. They offer high expected long-term returns (periods greater than 5 years), but are also liable to wider fluctuations in returns in the short term (periods less than 5 years).  The 10X High Equity portfolio is weighted strongly towards these investments. 

Defensive Assets 

Defensive assets typically earn their returns from interest, and include investments such as bonds and cash. They are typically more resilient to short term market fluctuations – but on the downside provide lower long-term returns. The 10X Low Equity portfolio is weighted strongly towards these investments.

At 10X, our default investment approach is called the 10X Automated GlidePath. What this means is that when you start nearing the end of your investment period, we automatically shift your money from a growth-oriented portfolio (10X High Equity Portfolio with higher exposure to shares and property) to a more defensive portfolio (10X Low Equity with higher exposure to bonds and cash). This means that as you near retirement your returns are less prone to fluctuation, as we endeavor to preserve your accumulated savings.

The following graph shows the investment weightings of the six 10X Life-Stage Portfolios – the longer the time frame, the greater the weighting towards growth investments.

You’ll notice that all the returns in the chart are after stripping out inflation. This is critical because at current rates of inflation (approximately 6%), in twelve years’ time your money would be worth half of what it’s worth today. That is why our portfolios target an after-inflation return. The returns reflected here are the expected long-term returns on the 10X portfolios. However, in the short term, the portfolios are likely to deviate from this significantly.

So there you have it. One simple solution that does all the heavy lifting for you. With us you’ll never pay more than 1% per annum in total fees excl. VAT and you’ll always be invested in the right portfolio suited to your investment life stage.

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