Old Mutual has announced a new investment product which, the company says, is set to please investors because of its payment structures. Unlike with other investment products of which their payments are calculated using computerised models, estimates of risks and the likes, the new product addresses concerns of transparency and disclosure to investors.
“All charges and fees are fully disclosed. Retirement fund members therefore know how much they are paying and what they are paying for,” said Andrew Le Roux, chief executive officer for Old Mutual Namibia.

The investment portfolio, Absolute Growth Portfolios, is targeted at institutional investors and comprises of three options of 'Smooth', 'Stable' and 'Secure'. Le Roux said the portfolios target returns in excess of Namibian inflation, while smoothing returns to protect investors from volatility in the market.
“This approach, along with a higher exposure to equities and alternative investments than traditional smoothed bonus funds, will enable the portfolios to compete strongly with aggressive market related funds while at the same time offering investors peace of mind in the face of short term market volatility,” said Le Roux.
Each of the three options in the Absolute Growth Portfolios range offers a different level of guarantee on benefit payments on the investment at any stage. The Smooth range offers a 50% guarantee, while the Stable and Secure offer 80% and 100% respectively. “Even the 100% capital guarantee option has an explicit target investment return handsomely in excess of the inflation,” said Le Roux.
The advantage of the Absolute Growth Portfolios lies in the use of a reverse mechanisms used to absorb the impact of the peaks and troughs associated with investing in balanced portfolios, while yet in the long term it is still passing on all the underlying real returns to investors.
“This new range is the culmination of 40 years of investment experience that Old Mutual has with smoothed bonus portfolios and the targeting of real returns,” said Le Roux, adding that this concept has endured decades and remains the most effective way to reduce investment volatility without impairing the expected long term performance, especially in smaller market such as Namibia.