Our product solutions

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1 Our product solutions Momentum Wealth annuity Golden Income with-profit annuity Post-retirement medical aid Target Factor Classic Factor Enhanced Factor New fees Customisable lifestages Auto contributions FundsAtWork Core FundsAtWork Annuities Outcome-based investing Outcome-based investing Preservation Mandate only Factor packages Passives Smart beta Equity Fixed interest Alternatives Listed property Bespoke solutions Cost-effective retirement administrative with preferential fees on bundled business Stand-alone retirement fund Momentum Corporate Preservation Funds Momentum Wealth Preservation Fund Protection Smooth Growth Fund Smart Guaranteed +3 $ Mandate only Businesses with investments of more than R500 million can structure their own portfolios based on their objectives and investment strategy. Members are given access to Multiply Starter at no additional cost. The following building blocks can be used: Momentum MoM Factor Series TM Portfolio Ranges The Momentum MoM Factor Series TM Portfolio Ranges were officially launched in 2011, although many of the portfolios histories stem back several years under different names. The distinct objective was to create a differentiated offering that reflected the latest in investment thinking and would continue to adapt and evolve to stay abreast of emerging investment approaches and remain relevant for investors. Each portfolio reflects a different approach based on a shared outcomes-based investment philosophy, which should appeal to a broad spectrum of investment needs and investor thinking. Each of the portfolio ranges has a lifestage model, which allows a member of a retirement fund to switch from a more aggressive investment portfolio, with longer terms to retirement, to more conservative and, ultimately, defensive portfolios, as a member approaches retirement. The lifestage model uses term to retirement as a proxy for the risk a member is able to adopt. The Momentum MoM Factor Series TM Portfolio Ranges consist of the following ranges: Momentum MoM Enhanced Factor Portfolio Range TM (a range with traditional and alternative asset classes) Momentum MoM Classic Factor Portfolio Range TM (a range with traditional active asset classes) Momentum MoM Flexible Factor Portfolio Range TM (a balanced asset allocation range) Momentum MoM Target Factor Portfolio Range TM (a passive beta range) OUTCOME-BASED INVESTING 1

2 The distinct objective was to create a differentiated offering that reflected the latest in investment thinking and would continue to adapt and evolve to stay abreast of emerging investment approaches and remain relevant for investors. Passive portfolios Passive portfolios track published indices or a combination of indices. Although the fees are lower compared to active portfolios, these portfolios could be more volatile and/or cyclical compared to active portfolios, given that they are passive in nature. A passive strategy involves minimal expectations input and instead relies on diversification to match the returns of some market index. In effect, a passive strategy assumes that the market place efficiently reflects all available information in the price paid for securities. Smart beta portfolios These types of portfolios not only passively track published indices, such as the FTSE/JSE All Share Index and the Government Bond Index but also use additional strategies in an attempt to enhance passive returns. Equity portfolios The equity market is part of the capital market. Capital markets are markets in which businesses and governments raise money for the long term to finance capital investments and expansion projects. Equity in essence refers to shares in a company. A share can be defined as a piece of the capital of a company or part ownership of a company. Basically, a share is an acknowledgement that shows that the shareholder owns a small fraction of a company. When buying a share, you 2 OUTCOME-BASED INVESTING

3 are paying for a small percentage of everything the company owns and you are known as a shareholder. Therefore, a share is a representation of the amount of a company a person owns. Fixed interest portfolios A fixed-interest security is a debt instrument, such as a bond or debenture, investors use to loan money to a company in exchange for interest payments. A fixed-interest security pays a specified rate of interest that does not change over the life of the instrument. The face value is returned when the security matures. Fixed-interest securities are subject to interest-rate risk. Since their interest rate is fixed, these securities will become less valuable as interest rates go up in a rising-interest-rate environment. If interest rates fall, the fixed-interest security becomes more valuable. Alternative investment portfolios Investments such as hedge funds, private equity investments and commodities are classified as alternative investments. The opposite are traditional investments, such as shares, bonds, cash and property. Listed property portfolios A property group listed on the JSE is classified as listed property. Investing through a listed property may have significantly different risk management implications and risk profile from investing in an unlisted property. Investing in listed property is the most common approach and is usually implemented through a professionally managed portfolio of listed property portfolios, while unlisted property exposure can be in a managed portfolio of physical properties, or even an individual property. Bespoke solutions Momentum Investments can assist clients with the construction of bespoke investments portfolios based on their objective and investment strategy. A monthly report showing market values, asset allocation and investment returns, among others, is prepared and sent to the client. Preferential platform fees are offered where clients use the Momentum Investments building blocks in their portfolio construction. OUTCOME-BASED INVESTING 3

4 Protection Momentum Smooth Growth Fund Global The Momentum Smooth Growth Fund Global is invested in SA and global investments in line with a strategy designed to suit its objectives. Underlying returns are smoothed to reduce the volatility otherwise associated with investing in markets. The investment portfolio targets a smoothed return of inflation plus 4% a year, after the deduction of the investment management and underlying investment charges, over the medium to long term. The portfolio maintains a long-term strategic asset allocation that is designed to optimise the risk-return profile of the portfolio relative to its objective in line with Momentum Investment s outcome-based investment philosophy. In extreme adverse market conditions, Momentum s capital may be used to smooth returns, with this capital being recovered over the rest of the investment cycle. Under these conditions, portfolio hedges may be implemented at the cost of the portfolio to prevent permanent loss of capital. Vesting and non-vesting bonuses are declared monthly in advance. Underlying investment returns are smoothed over a five-year period. Bonuses are declared monthly in advance and added to the bonus account, which compromises a vesting and non-vesting element. If investment markets fall for a sustained period, part of the non-vesting account may be removed. Momentum Smart Guaranteed +3 This new-generation guaranteed product from Momentum combines the best from outcome-based investing and dynamic hedging techniques to give clients a smoother investment experience over time. The portfolio also offers one of the most competitive fees for smooth-bonus-type products. The portfolio secures a guaranteed return of original capital and contributions invested plus accumulated bonuses at the date of a benefit payment. Benefit payments are defined as payments following death, disability, retirement, retrenchment or resignation. The portfolio targets an average smoothed return of inflation plus 3% a year, after the deduction of all charges, over a seven-year time horizon. Payments are made at the lower of the portfolio value or the underlying investment value. The liability-driven investment strategy includes a protection overlay to secure the guarantee. As a result, the underlying investment value on disinvestment is sensitive to investment values and interest rates. Stand-alone retirement fund Trustees have to consider that the members in the retirement fund need to retire with enough money to maintain their lifestyle as closely as possible and also be covered adequately if they become disabled or die. Taking all these considerations into account, Momentum Retirement Administrators provides solutions that speak to sound benefit administration and investment management services, as well as addressing the needs of members in the most cost-effective manner. It is our aim to build and maintain enduring relationships by providing services and solutions that exceed expectations. Our broad range of administration services, investment management services, insurance, education, Financial Wellness solutions and other offerings provide members with the best possible financial solutions because good Financial Wellness enables them to achieve their goals in life. Highly competitive administration fees are offered where the retirement fund chooses to invest with Momentum Investments. FundsAtWork One of the core business needs is to have a productive workforce. There are a number of factors that influence an employee s productivity of which 4 OUTCOME-BASED INVESTING

5 their financial and physical health are the largest influencers. If a business takes care of its employees financial and health stress levels, it is taking care of its bottom line and overall Financial Wellness. The needs of employees can be very extensive and varied, but, ultimately, all employees would like to improve their quality of life. We aim to address the need for employees to be physically, emotionally and financially healthy to enhance their productivity. In a nutshell, quality of life maximises a person s wellness (quality of health) over their lifetime. Wellness, in turn, promotes Financial Wellness, as a healthy person is fundamentally employable. At the same time, we to hope to augment the quality of life in retirement as well as when unforeseen circumstances happen, such as death or disability. The Financial Wellness needs of employers and employees can be taken care of with the FundsAtWork Umbrella Funds, which offer solutions for retirement, insurance, preservation and lifestyle. The solutions are used by the financial adviser to provide the employer with expert financial advice. The FundsAtWork investment range has now been extended to allow clients access to the Momentum MoM Target Factor as well as the Momentum MoM Classic Factor outcome-based portfolio ranges under the Provider product option. New fees From 1 October 2017, the investment management fees for the Momentum MoM Target Factor, the Classic Factor and the Enhanced Factor Portfolio Ranges have been changed to be more beneficial to the members. These will apply to members in the Provider product option. The new investment management fees are: Total scheme Momentum MoM Target Momentum MoM Classic Momentum MoM Enhanced investments Factor Portfolio Range TM Factor Portfolio Range TM Factor Portfolio Range TM R0 to R25m 1.00% 1.30% 1.50% R25m to R50m 0.85% 1.00% 1.25% R50m to R100m 0.80% 0.90% 0.95% R100m to R250m 0.65% 0.75% 0.80% R250m to R500m 0.55% 0.65% 0.70% R500m to R1bn 0.50% 0.60% 0.65% More than R1bn 0.45% 0.55% 0.60% OUTCOME-BASED INVESTING 5

6 Customised lifestage portfolios FundsAtWork Entrepreneur 2 is an innovative retirement solution that provides a unique and tailored pricing structure to employers with large retirement fund investments. Employers can use the building blocks of the Momentum MoM Target Factor, the Classic Factor and the Enhanced Factor Portfolio Ranges to customise their lifestage portfolios. They can also decide on the glide path and the term to retirement. Auto contribution increases FundsAtWork offers members and employers an easy and seamless process to increase their retirement contribution levels over time. The employers can pre-select their salary review dates as well as their intended contribution levels at those future dates to help members enhance their ability to meet their retirement goals. For example: The employer selects January as the annual contribution auto increase month to coincide with its annual salary review month. At installation, the total contribution is 10% and the employer selects the increase to be 5% in years one to five. In January of the first year, the contribution rate will increase by 5% and will be 10.5%. FundsAtWork Core The simplest way for employers to start their employees on their Financial Wellness journey FundsAtWork Core is a low-cost solution that offers employers the opportunity to help their employees by providing for their retirement and insurance needs. By offering life insurance, disability insurance and retirement savings benefits, employees will have more peace of mind about their finances, their productivity will improve and the business bottom line will benefit. Some of the exciting aspects of FundsAtWork Core: Members will get access to online doctors through Hello Doctor and discounts at our partners through Multiply Starter at no cost to the members. Employees who earn less than R5 000 per month will not pay asset management fees. They will only pay a low administration fee, fund expenses and insurance premiums. We focus on education and financial literacy by providing information that is easy to understand, is offered to the members at the right time and in electronic formats. From Core, employees can further enhance their own Financial Wellness through Momentum s comprehensive individual solutions. The facility allows the scheme s financial adviser to play an important role in assisting the employer to determine an optimal long-term contribution pattern, taking the circumstances of that employer and the members needs into account. The employer can opt out of the arrangement at any time. 6 OUTCOME-BASED INVESTING

7 Annuities Momentum Golden Income with-profit annuity Momentum s Golden Income with-profit annuity allows retiring members to outsource or transfer their post-retirement liability to Momentum in exchange for an upfront premium. Momentum promises to make all pension payments to members as long as they are alive, as well as pay benefits to named beneficiaries. Increases are granted every year and, once an increase is granted, will never be taken away. The pension increases are determined by the returns of the underlying investments in the with-profits pool. To manage the investment risks and to provide for future increases and the guaranteed pension, the underlying portfolio is managed using a dynamic asset-allocation process. This helps to protect the pension in payment when investment returns are poor, while, at the same time, provide exposure to the market upside for pension increases. Golden Income provides increases that have the potential to keep up with inflation, in a cost-effective manner. Post-retirement medical aid solutions Clients needs can be liability-driven, for example meeting a post-retirement medical aid liability. After consultations with the client, we model a solution to fit within a framework of outcome-based investing. We realise material changes to any of the clients circumstances and objectives, investment markets and/or liability profiles, can affect the ideal strategy. We carry out ongoing monitoring and review of our clients strategies to ensure the tailored solution remains relevant and appropriate. Preservation Momentum Corporate Preservation Funds Momentum s Corporate Preservation Pension and Provident Funds are aligned to government s vision and meet the needs of trustees to provide a cost-effective preservation vehicle for members who withdraw from their retirement funds before they retire. The funds offer the following unique benefits to members who want to preserve their benefits for the long term: No initial fees Benefiting from institutional pricing arrangement Member flexibility to ensure their unique needs are catered for Funeral benefit of R provided at no additional cost, pays on the death of the main member Momentum Multiply Starter, Momentum s wellness programme, at no additional cost OUTCOME-BASED INVESTING 7

8 The value proposition is able to meet each member s needs in a unique, comprehensive and innovative way. Momentum Investments (Pty) Ltd is a division of MMI Group Limited, which is an authorised financial services and credit provider. 268 West Avenue Centurion 0157 PO Box 7400 Centurion Registration number: 2010/021352/07 Momentum Wealth Preservation Fund Members can preserve their retirement benefits in the Momentum Wealth Preservation Fund. This will ensure their retirement planning remains on track. Members can choose from a wide range of investment components to suit their needs and personal circumstances. If these needs change, they can adjust their portfolio at any time. The key benefits and features are: Members benefit from the holistic offering. The value proposition is able to meet each member s needs in a unique, comprehensive and innovative way. The wide range of complementary investment products and services gives the members the opportunity to respond to their changing investment needs, with specifically tailored investment solutions. Members can choose from a wide range of investment components. They can structure their investment around their appetite for risk, investment timeline and specific investment needs. Members have the flexibility to invest in local and global collective investment schemes, exchange-traded funds, direct shares in the 40-largest companies, personal share portfolios and protected investments all in one investment. If members are concerned about fluctuating market conditions, they can phase-in their lump-sum investment over a period of up to two years from a money market portfolio. We also offer portfolio management and fiduciary services that allow members to maximise their investment-return potential and protect their wealth. Minimum amounts apply. 8 OUTCOME-BASED INVESTING