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World Bank: Contributory pension fund could help SA’s poor

A contributory pension system, subsidised for poor South Africans, will impact both poverty and inequality, Parliament has heard – driving “forced savings” and helping people build assets that can be invested.

Speaking to Parliament’s Standing Committee on Finance (SCOF) on Tuesday, Marek Hanusch, a senior economist for the World Bank’s global practice for macroeconomics, shared the organisation’s proposed model to address poverty and inequality. The model is based on research in the World Bank’s book An incomplete transition: Overcoming the legacy of exclusion in South Africa, published in April 2018.

Proceed to Source : Fin24

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Magda Wierzycka shuts Sygnia hedge funds, slams managers for investment ‘ruse’

South African money manager Sygnia Ltd. closed all its hedge-fund products, ending a 13-year history with an investment strategy its chief executive officer now calls a ruse to pocket fees.

“Once you know that the emperor has no clothes you cannot in good conscience support what has become a management-fee racket,” Chief Executive Officer Magda Wierzycka wrote in an opinion piece in Johannesburg-based daily newspaper, Business Day.

Proceed to Source : Biznews

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Have balanced funds changed investor behaviour?

South African investors have had to deal with very muted returns for the better part of the last five years. Between July 1, 2013 and June 30 2018, the average return from unit trusts in the South Africa multi-asset high income category was just 8.2%.

This was a mere 2.8% ahead of inflation for this period. Given that these balanced funds would ordinarily be expected to produce returns of at least CPI + 5% over a five-year period, this is obviously disappointing.

What is notable, however, is that despite this situation investors have continued to favour these strategies. The latest statistics from the Association for Savings and Investment South Africa (Asisa) show that multi-asset high income funds continue to be the main savings vehicle for most people invested in local unit trusts.

At the end of June this year, the assets of funds in this category increased to above 25% of all assets in South African collective investment schemes for the first time. As the table below shows, it is the only major fund category to have shown consistent growth in both terms of assets and as a percentage of the total over the last five years.


Proceed to Source : MoneyWeb

Can pension fund money do more?

South Africa has a pension fund pool of around R4 trillion. This is a significant collection of assets.

However, speaking at the Alexander Forbes Hot Topics Summit in Cape Town last week, the head of the Alexander Forbes Research Institute, Anne Cabot-Alletzhauser questioned whether this money is currently being used in the most optimal way.

“Our savings are the biggest potential driver of economic growth,” said Cabot-Alletzhauser. “How can you take that power and transform it into something even more significant?”

Currently, pension funds are invested predominantly in listed markets. There are two well-accepted reasons for this.

Proceed to Source : MoneyWeb 

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GEPF’s Pareto eyes JSE listing

The Government Employees Pension Fund (GEPF) plans to list a property portfolio of shopping malls on the JSE, bringing real estate investors more exposure to SA’s retail sector.

Pareto Limited, which is 76% owned by the GEPF, is set to list on the JSE’s main board in 2019 – a plan first mooted by management in 2016 but put on ice due to SA’s difficult economic and trading conditions at the time.

Proceed to Source : MoneyWeb

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CIS industry assets racing to R2.5 trillion

JOHANNESBURG – Investors ploughed R26 billion in net inflows to the local Collective Investment Schemes (CIS) industry in the second quarter of the year, with the combined value of assets in the sector racing towards R2.5 trillion at the end of June.

The CIS industry statistics for the quarter ended June yesterday showed that the growth net inflows pushed total net inflows for the year ended June to R96bn.

Proceed to Source : IOL

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Treasury to announce on Venda Pension Fund by month-end

National Treasury says it is reviewing a report on the payment of pensions to beneficiaries of the former Venda Pension Fund in order to develop the next best course of action.

In August last year, the Ministry of Finance announced that the then Minister, Malusi Gigaba, intended to resolve the payment of pensions by the end of November 2017.

Proceed to Source : Insurance Gateway

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Government pension fund has R1.6bn in unclaimed benefits

The government is urging former public servants and their beneficiaries who may be owed benefits by the Government Employees Pension Fund (GEPF) to contact the fund.

The GEPF owes R1.6 billion in unpaid and unclaimed benefits.

Last week, Public Service and Administration Minister Ayanda Dlodlo said that, as of May, there were 44 190 cases of unpaid and unclaimed benefits.

Proceed to Source : IOL

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Rot is killing jobs

The Financial Planning Institute will shed staff through a retrenchment process following the shutdown of its exam unit, which is being investigated because of suspected corruption.

The institution, which is being probed by the Financial Sector Conduct Authority (FSCA), has told its staff that it will be undergoing a retrenchment process.

The institute did not know how many people would lose their jobs. But, it said, the exam section would be closed.

Proceed to Source : Fin24

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AI disruption: Is robo-advisory a threat to financial planners?

The financial services ecosystem is witnessing a rapid technological change

From opening a bank account or buying an insurance policy to fighting cancer or even buying a pair of shoes, we are increasingly being helped or influenced by artificial intelligence (AI).

In Mumbai, designers Falguni and Shane Peacock used AI to create their latest collection. In Bengaluru, a startup is using AI to improve detection of breast cancer and also make treatment cheaper. And in the Tata Motors plant in Pune, a robot is skilled enough to do 30 different tasks — that’s artificial intelligence again.

The world around is changing much faster than we can imagine, and this six-part series goes behind the scenes to understand how.

Proceed to Source : Moneycontrol 

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