Stay cool under pressure:

Sygnia launches new fund range to ease investor anxiety amid market turbulence

Feeling stressed by market conditions? Sygnia has launched a new retirement savings fund range to give investors peace of mind amid market turbulence. The asset manager’s Co-Head of Investments, Iain Anderson, explains how the new ZenFunds range is designed for stress-free investing at all levels. 

South African retirement investors haven’t had an easy ride for the past few years, faced with escalating interest rates and uncertainty about when this pressure will ease; an unstable political climate (shaky but tinged with hope for the fledgling government of national unity); and the Regulation 28 reality of having to stake a significant portion of their nest eggs in domestic markets.

All in all, it’s an anxiety-inducing financial game that would make even the most poker-faced investor break into a sweat. And this, quite simply, is why we’ve launched the new Sygnia ZenFunds, a range of funds designed to enable investors to “keep calm and carry on investing” no matter the hand they’re dealt.

The Sygnia ZenFunds range is comprised of four funds carefully designed to perform well in today's tricky terrain of high real interest rates and sluggish growth. Each fund is fully compliant with Regulation 28 requirements, making them a perfect fit for retirement savings. They cater to investors at various life stages (both before and after retirement) looking to generate steady income from their investments.

Yes, investing in SA can pay off!

We also believe there are well-founded reasons to invest strategically in South Africa. According to an April 2024 report by PricewaterhouseCoopers (PwC), South Africa – despite its challenges – “has seen a positive net foreign direct investment flow every year since the global financial crisis [2008]”.

Most recently, the report noted, South Africa recorded foreign direct investment inflows of R96.5 billion in 2023, equal to 1.4% of the country’s gross domestic product.

So while we at Sygnia still advocate taking full advantage of the 45% offshore allowance for long-term retirement growth investments, we also strongly believe in South Africa’s growth potential.

As such, the ZenFunds are positioned to enable investors to generate steady, secure income by investing in low-cost, low-risk, solid domestic assets.

Fund 1: ‘So much better than a savings account’ fund

While all four funds are firmly within the low-risk category, each has a varying level of risk, starting with the lowest-risk Sygnia Money Market Fund. This is Sygnia’s own money market portfolio, designed to help you earn more interest, keep your investment safe and give you quick access to your money.

This low-risk option is perfect for the conservative part of your long-term retirement savings.

My colleague Lorna Knoetze, Head of Retail Administration, is best placed to explain how and why clients incorporate the ZenFunds into their investment portfolios.

She says the Sygnia Money Market Fund is most commonly used to “park” three months of clients’ cash requirements, because: “it provides easy access to cash while ensuring their money is still working for them."

Fund 2: The post-retirement income generator

The second-lowest-risk fund in the ZenFunds range is the Sygnia Enhanced Income Fund, positioned to beat the returns you’d get from a regular cash investment, but with minimal ups and downs.

This fund invests in a variety of income-generating assets, mainly floating rate instruments, which means it has very little interest rate risk and can focus on providing steady income.

By combining elements of money market and bond funds, investors get the benefits of credit and liquidity premiums without the long-term risks.

Lorna reports that the Sygnia Enhanced Income Fund is very popular with retired clients, who are: “comfortable with a slightly higher level of volatility to generate higher yields for their retirement”.

Fund 3: The post-retirement capital preserver

Next up is the Sygnia Life Income Maximiser, perfect for those with living annuities who want to get the most out of their investments without dipping into their capital.

This fund moves smartly between South African money markets, enhanced income options, listed property and bonds to balance high returns and low risk based on the current economic climate. It is ideal for conservative income generation after retirement.

However, this fund is only available to clients invested in a Sygnia living annuity, Sygnia retirement annuity, Sygnia preservation fund and Sygnia investment policy.

Asked why clients are opting for the Sygnia Life Income Maximiser, Lorna says: