OCTO

BER 2

019

Generation Z (up to early 20s)

The “always on” generation, tech-savvy, multi-taskers and entrepreneurs

Generation Z should immediately start building good saving habits that will set them up for the rest of their lives. Your retirement fund is the most tax-efficient savings vehicle to invest in for the long term.

As a member of the Media24 Retirement Fund, you have the choice of different employer contribution options, such as the life-cycle, the age-based and five fixed rate contribution options. Click on either the ‘Contribution calculator’ or the ‘Retirement provision calculator’ on the Fund’s website for more guidance on selecting the most appropriate employer contribution option for you. You can also get a tax deduction on the contributions you make to the retirement fund.

The Fund provides you with a range of investment portfolios, each with different risk and expected investment return characteristics. Remember – saving for retirement is a long-term strategy, so the younger you are the more investment risk you are able to take, because you have time on your side.

Speak to a financial advisor who can help you establish how much risk you can take.

Suggestion

Tip

Important

SAVINGS TIPS for your GenerationEveryone needs to save for retirement. However, as much as one person’s needs differ from another’s, each generation has its own financial and investment preferences. Understanding the generational differences may be the secret to avoid money worries once you retire.

Generation Z are believed to be money conscious at a young age and have already started thinking about financial planning. They prefer quality above quantity and believe it is important that a brand sells high-quality products. They are more likely to lean towards tech-driven investing, usually have more than one job and although they will save, it will not be in the traditional sense.

This generation needs to realise that saving is unavoidable and could look at unit trusts or a tax-free savings account (TFSA). They have time on their side – therefore, they can invest in more high-risk shares (equities) and stocks. However, unit trusts and TFSAs have no withdrawal restrictions and, as a result, members can easily access their savings. Where unit trusts are loaded with higher-risk investments, prices will fluctuate and withdrawing savings when prices are down could deplete the pot of savings.

Style

Guidance

OCTOBER 2019 .1.

Millennials (20s and 30s)

Independent, will interact with any online tools offering advice or solutions

The Old Mutual Savings and Investment Monitor shows 24% of millennials have invested in unit trusts and 69% are saving with the bank, but only around 44% are saving towards retirement with an employer fund.

This generation is also still young, similar to Generation Z, so they also have time on their side. They can take on investment risk to maximise growth of their savings and can consider unit trusts, retirement annuities and property if an employer fund is not provided by the company.

Remember, it is always important to speak to a financial advisor who can help you understand your investment risk and advise you on appropriate investment products.

Style

Guidance

Generation X (40s and 50s)

The “sandwich” generation (stuck between supporting their parents and their kids), financially strapped but still like to spend.

Generation X have possibly spent their money on upgrading homes, buying cars and generally trying to keep up with their peers, and saved less for retirement. They now need to close the gap by growing their retirement savings as much as possible, while also trying to protect it. For those who have not made the necessary provision for retirement, this is when anxiety can set in.

This generation needs to save in an employer fund. Monies from previous funds (changing jobs) or savings from periods of self-employment should be consolidated to save cost. If you need to close the gap, you may need to invest in shares (equities) that focus on growth but don’t involve too much risk. If your risk is too high when nearing retirement, you could lose money and you might need to reduce your standard of living during retirement or delay your retirement until such time that you will be able to retire more comfortably. It is time to seek the assistance of an accredited financial advisor to help you understand your financial position and map the best way forward.

Style

Guidance

This group is now officially the adult members of society, and members are likely to have spouses and may have children, and need to update their nomination forms and ensure that they have sufficient risk (life) cover, etc.

Revisit your contribution option to ensure that you are saving enough for retirement. Track your investments if not invested in the Lifestage model, to ensure that you are not invested too conservatively. Consider your options carefully when changing jobs, as taking benefits in cash before retirement means you will have to start saving all over to make up that loss. The Media24 Retirement Fund offers you the option to preserve your benefit in the Fund upon leaving the employer. Click here to read more about preservation in the Fund. If you would like to buy additional life insurance you have the opportunity to do so via the employer's group life assurance scheme. Contact Retirement Management Services for more information.

Suggestion

Tip

.2.

Suggestion

Tip

Realistically this is the time when you start making more concrete plans for your future. If you have extra cash on hand, to invest and save more. Clearing your debt should be given some consideration and if you leave the fund, avoid taking a cash benefit as the withdrawal will be subject to tax deductions.

As a member of the Media24 Retirement Fund, you are able to make monthly additional voluntary contributions (AVCs) or a lump sum AVC upon receipt of a bonus. The additional contributions allow you to boost your retirement savings and carries no administration costs i.e. the full amount is invested and allocated to your fund credit. You can also consolidate all your retirement savings by transferring your money from other funds into the Media24 Retirement Fund.

Suggestion

Tip

You should be completely or almost debt-free, finalising your retirement plans and ensuring your beneficiary nominations are up to date, and make the final decision regarding the type of annuity (pension) you want to purchase for retirement (life annuity vs living annuity).

If you haven’t saved enough for retirement don’t panic. The most important thing is that you take action immediately by considering the following:

Review your expenses – estimate how much money you will really need when you retire, and cut back on unnecessary expenses.

Save as much as you can – make additional voluntary contributions to your tax-efficient retirement fund.

Make your money work for you – ensure that your savings are structured in the most efficient way from an investment return, a cost and tax point of view.

Stay active and productive during retirement – consider working a little longer (possibly pursuing a second career) by becoming a deferred retiree in the Fund (i.e. you leave your money in the Fund until you are ready to go on pension).

Suggestion

Tip

Baby Boomers (50s, 60s and 70s)

Were typically invested in previous defined benefit employer funds

Baby Boomers invest more conservatively, phasing out of high risk and into lower risk investments as they grow older. Closer to retirement, they will most likely be fully invested in cash or bonds, focusing on preservation of their retirement benefits rather than growth.

The last big decision facing this generation is what type of annuity (pension) to buy at retirement. A living annuity also pays you an income, but a life annuity targeting inflation increases will prove more beneficial over the long term, as it will ensure that you maintain your buying power during retirement. When deciding on the type of annuity, you need to carefully compare costs as well as the advantages and disadvantages of the different types of annuities. And remember, when choosing a living annuity, don’t draw down too much of your savings as a monthly income, as your savings should last through all your retirement years.

Style

Guidance

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Contact Retirement Management Services on retfund@media24.com to put you in touch with a financial advisor to assist with your retirement planning.

All in all, true wealth is peace of mind – not a fancy car or the latest gadgets. So make sure your money is exactly where it should be right now, working for you.

The Media24 Retirement Fund offers its members a great platform for savings with linked risk benefits. Both the retirement savings and associated risk benefits offer members economies of scale, and exposure to a number of investment portfolios and reputable managers. The Fund is therefore a good vehicle to assist members in reaching financial independence.

Tax deductibility of contributions to a retirement saving vehicle

A member will be able to receive a tax deduction on both their and the employer's contributions to a pension, provident or retirement annuity fund of up to 27.5% of their 'remuneration' or 'taxable income', whichever is greater. There is a rand cap of R350 000 on the total amount a member may deduct from their taxable income in any tax year.

.3.

BasicINVESTMENT TERMSHere are some of the more basic investment terms and their definitions, as often used in your Fund communication. You can also refer to the website (https://yourfund.co.za/media24) for more information on investments in general.

Capital Risk

The potential risk of losing part, or all of your capital (also known as your investment).

Asset Classes

These are the types of investments available, i.e. things that you can invest your money in, for example, property, bonds, cash or shares (equity).

Inflation Risk

The potential risk that your investment will not grow as quickly as inflation, resulting in a reduction in your buying power.

Inflation Rate

Over a measurement period, this is how much more it will cost you to buy a “basket” of goods at the end of the period compared to what it cost at the beginning of the measurement period.

Investment Portfolio

Your money is likely invested in different asset classes – - these combined assets are referred to as your investment portfolio.

Investment Returns

The money you can potentially earn, or lose, on your investment. This is similar to interest earned ata bank.

The gross investment return over a measurement period is the growth in the market value of the asset for a specific period, divided by the market value of the same asset at the beginning of the period. Any new money invested or disinvested has to be taken into account. More correctly, this is known as the nominal investment return.

The net investment return is the gross investment return less the manager fees. This is the return that is credited to your Fund Credit.

The measurement period is the period (say, 1 year or 3 years) over which one measures the investment return.

The real investment return is the nominal investment return less the inflation rate over the same measurement period. It is an important measure since it calculates how much better your investments have done than inflation.

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.4.

Risk Profile

Also known as your risk appetite i.e. how much risk you are willing and can afford to take. Your most important consideration is the number of years you have left until retirement; this period is also referred to as your investment horizon.

Member Investment Choice (“Own Choice”)

Members choose what percentage of their fund credit to invest in one or more portfolios offered by the Fund.

Lifestage Portfolio (Trustees’ Default Choice)

This is an investment strategy set up by the Fund’s trustees. It is a strategy whereby your money is automatically phased from a high growth/high risk portfolio into lower risk portfolios as you age.

Yield

This is another word for investment returns.

Risk-off Trade

This is an investment environment where investors tend to invest safely and run for shelter opting for bonds or gold.

Volatility

This is a measure of how much the investment return can vary (fluctuate) over the measurement period. It is a measurement of the risk you take – the higher the volatility, the higher the risk.

Investment Risk

This refers to the probability or likelihood of the occurrence of losses relative to the expected return on any particular investment.

Market Exposure

This looks at the percentage of each asset class you have included in your portfolio. The more shares you have, the higher your market exposure and that usually means you have more investment risk.

.5.

Should you PANIC

about prescribed assets?

Should you PANIC

about prescribed assets?

BackgroundOn 22 August 2019, President Cyril Ramaphosa called for a national dialogue about the introduction of prescribed investments for retirement funds. This means that the state could make institutions such as pension funds and insurance companies to invest a part of their funds in state institutions or bonds.

This announcement was made to the national assembly and has since become a major topic of interest for South Africans. Announcements such as these can create concern among fund members and uncertainty in the markets. Fund members and investors alike would like to know if the proposal will be adopted, and what it would mean for their savings.

What is being proposed

The road ahead

Prescribed assets would compel South African asset managers and pension funds to invest a portion of their assets in prescribed investments. The move

Eskom and SAA.

You may not have known that retirement funds do already invest in state-owned enterprises, as long as the investments are in line with their

words, they can choose to invest in these state institutions only if they are sustainable, suitable, and in the members’ best interests.

Once parliament approves legislation, it is referred to the President before it becomes law. No such process on prescribed investment has started to date.

Retirement funds and industry roles players will have the opportunity to provide input and comment on prescribed investments in the coming months. Understandably, the retirement fund industry is subject to regular reviews and debates surrounding investment regulations. It is very important to remember that nothing has been decided yet and that your Fund will take all possible measures to protect its members and assets. An election manifesto to investigate an issue does not have the same force as legislation: simply put, the statement of intent in an election manifesto to investigate this matter should not cause unnecessary alarm.

www.insiteeducation.co.za

InSite Innovative Education Solutions (Pty) Ltd 2019

Disclaimer:

advice in terms of the Financial Advisory and Intermediary Services Act of 2002 or any other form of advice. No warranty is provided that the information is appropriate or suitable for any particular purpose.

.7.

Update fromTHE PRINCIPAL OFFICERDear Members

This has been a busy year with the new Default Regulations implemented in March 2019 and now, close on its heels, there is a lot of speculation around prescribed assets. We have included some background on what this is exactly, what is being proposed and whether there is any need for panic.

We take a look at the local and international market overview and investment performance for the third quarter. Given the upward trend in the property market, we have asked the Fund’s South African property managers to provide their views on the current market environment and their outlook for the property market going forward. While on the topic of assets, we have also included a refresher on some basic investment terms and what they mean.

Since saving for retirement is very important for any age group, we have included an article on savings tips for your generation and, hopefully, some of this will appeal to you and re-energise your savings drive.

As a reminder… it’s always a good time to update your nomination of beneficiaries form!

Visit the Fund’s website now at http://www.yourfund.co.za/media24

Fund regards

Lynn van der Merwe

Tel 021 406 3326 | Fax 086 721 3447Email retfund@media24.com | Website http://yourfund.co.za/media24

Fund Contact Details

.8.

Performance Summary as at30 SEPTEMBER 2019 (Net of fees)Portfolio / Index

Growth

Balanced

Stable

Money Market

OM Shari’ah Balanced

CPI

Quarter

0.77%

0.85%

1.08%

1.93%

-0.27%

0.89%

1 year

2.59%

2.59%

3.12%

8.05%

1.05%

4.52%

3 years

4.42%

4.43%

4.94%

8.22%

2.26%

4.64%

5 years

5.94%

5.87%

6.01%

7.82%

n/a

4.92%

10 Years

10.03%

9.01%

7.69%

6.93%

n/a

5.08%

Annualised*

0.64%

0.59%

0.55%

0.35%

1.00%

n/a*Fees annualised for the year

InvestmentPERFORMANCEREPORT

INTERNATIONAL SOUTH AFRICA

Click here to read more

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Click here to read more

MARKET Overview

Global equities had a mixed third quarter, with developed markets making small gains while emerging markets declined. In global equities, the MSCI World gained a modest 63 basis points (bps) over the quarter, while the MSCI Emerging Markets lost 4.69% (in US Dollar terms). Global property markets were the best performing asset class, gaining 7% from June to September; commodities saw gains in Precious Metals offset by notable weakness in the Energy sector. The US Dollar continued its dominance on the currency front, with most developed and emerging market units depreciating against the US Dollar Index. The British Pound was volatile, on Brexit sentiment, but appreciated against major currencies.

Given the state of the economy and the poor performance of the property market since the beginning of 2018, a surprising upward trend has been seen and we have asked the Fund’s South African property managers, ABSA and Sesfikile, for their view on the current market environment and their outlook for the property market going forward.

South African investors faced poor returns for the quarter: Equities declined, with the SWIX reporting a 4.7% loss for the quarter, and the All Property Index fell by 4.3%. The ALBI was amongst the better performing asset classes, gaining 84 bps from June to September, and Inflation Linked Bonds ended a modest 13 bps higher. Cash generated the biggest returns (1.89% higher).

Resources slowed down further in the third quarter, losing 7.73%. This is despite an improvement in Gold prices, with spot gold 4.47% higher. Platinum Group Metals also ended in the green, gaining 5.8%, but iron ore was notably lower (-17.26%) as demand from China reduced.

HISTORICAL PERFORMANCE of the Fund

Growth Balanced Stable Money Market CPI Shari’ah

-100.0%

0.0%

100.0%

200.0%

300.0%

400.0%

500.0%

600.0%

700.0%

800.0%

900.0%

Sept-10Sept-09 Sept-17 Sept-18 Sept-19Sept-16Sept-15Sept-14Sept-13Sept-12Sept-11

Investment Managers OUTLOOK

Property Fund

ASSET ALLOCATION per portfolio

MANAGER PERFORMANCE (Gross returns) as at 30 September 2019

Balanced Money Market

100%

Growth Stable

TOP TEN Domestic ShareholdingsNaspers Limited British American Tobacco PLCProsusStandard Bank Group LtdAnglo American PLC

11.4%5.1%

4.6%4.4%3.9%

12345

Sasol LimitedImpala Platinum Holdings LtdBhp Group PLCRemgro LimitedNedbank Group Ltd

3.2%3.1%2.7%2.5%2.5%

678910

Click on these links to accessthe following additional information:

Investment Manager’s CommentaryWebsite Investment PageOld Mutual Shari’ah Balanced Portfolio Factsheet

Local Shares

Local PropertyInflation Linked Bonds

Local Bonds

Local Cash International

32%40%

18%3%3%3%

4%

4%

38%38%

11%3%3%3% 5%5%

24%35%

26%5%5%

5%

Tel 021 406 3326 | Fax 086 721 3447Email retfund@media24.com | Website http://yourfund.co.za/media24

Fund Contact Details

.9.

Manager Date of

Appointment 10 Years5 Years3 YearsQuarter Asset Class 1 Year

Allan GrayCoronation ABAXFairtree

15% Capped SWIX Futuregrowth

BEASSA all Bond Index (ALBI)Futuregrowth 2

ILB BenchmarkSesfikileABSA

All Property Index (ALPI)InvestecSanlam

STeFI Composite Index Allan GrayInvestecFoordAll Seasons Venture Partners

Morgan Stanley Capital International All Country World Share index (MSCI)

China

Shares (Equity)

Bonds

Inflation Linked Bonds

Property

Cash

International

International

01-Oct-0201-Feb-0701-Oct-1801-Oct-18

01-Sept-17

01-Oct-17

01-Aug-1401-Oct-18

01-Dec-0001-Dec-00

01- Oct-0201-Feb-0701-Jul-13

01-May-19

Blackrock

Old MutualBlackRock portfolio benchmark

China benchmarkInternational

Shari’ah Balanced portfolio benchmark

Shari’ah Balanced

01-Nov-18

01-April-16

01-Feb-16

-3.36%-3.70%-4.67%-1.04%-4.90%1.09%0.78%-1.64%11.00%-2.67%-0.62%-4.18%2.11%1.96%1.83%7.44%3.06%7.16%10.91%7.50%8.45%3.45%2.87%6.82%0.50%-1.00%

-7.32%-1.36%0.95%13.13%-1.90%11.86%11.48%-1.46%-2.01%-1.76%0.93%-7.66%8.65%8.25%7.38%-2.28%3.58%5.25%

n/a8.62%

n/an/a

4.90%8.20%3.10%3.30%

0.94%0.88%

n/an/a

1.60%n/a

8.90%n/an/a

0.04%n/a

-5.40%8.85%8.27%7.43%9.06%11.71%9.48%

n/a13.34%

n/an/an/an/a

5.70%6.60%

4.47%3.06%

n/an/an/an/a

8.27%n/an/an/an/a

1.12%8.34%7.97%7.16%11.35%11.74%10.08%

n/a13.12%

n/an/an/an/a

7.00%5.90%

11.40%11.80%

n/an/an/an/a

8.78%n/an/an/an/a

9.90%7.34%7.17%6.54%12.44%13.97%

n/an/a

16.13%n/an/an/an/an/an/a

Futuregrowth 2 = Futuregrowth Long Dated Passive ILB