An innovative collaboration leads to an ethical new fund

A dynamic partnership between Old Mutual Wealth and the Gift of the Givers Foundation has ushered in an innovative era of impact investing with the introduction of the Old Mutual Gift of the Givers Life Fund. The fund is designed to advance real change and meaningful impact in South Africa whilst adhering to ethical investing principles.

This initiative aligns seamlessly with the government’s vision of enhancing disaster response capacity, as proclaimed recently by Finance Minister Enoch Godongwana in his Budget Speech, through the launch of the government’s Climate Response Fund.

A dynamic partnership

The Gift of the Givers Foundation, a non-profit organisation,  receives a lot of support from their generous partners who are primarily from the corporate sector, which enables them to effectively respond to crises and disasters. However, for them the demand often exceeds their available resources, and committing to sustainable projects becomes challenging when future funding remains uncertain, particularly in the current economic climate. The partnership with Old Mutual Wealth is envisaged to offer an effective remedy to this dilemma.

Sustainable funding through investment

This fund transcends traditional investment by channeling dividends into life-changing initiatives supporting disaster relief, water provision, hunger alleviation and community development. Through this novel approach, investors’ desires to leave a legacy beyond wealth accumulation can be achieved.

Old Mutual Wealth is driven by a deep-seated ambition to help their clients achieve their wealth creation goals, all while acknowledging the integral connection between business success and the well-being of their communities. According to them, this fund represents what should be the new normal in investment, the blending of impact-led and sustainability initiatives with wealth creation.

The underlying fund

The Old Mutual Gift of the Givers Life Fund is structured as an endowment portfolio, fully invested in the Old Mutual Albaraka Income Fund.

The Old Mutual Albaraka Income Fund adheres to Shari’ah laws and does not invest in companies involved in alcohol, gambling, nonhalal foodstuffs or interest-bearing instruments. Old Mutual ensures compliance across its Shari’ah range through a Shari’ah Supervisory Board, responsible for ensuring that the funds adhere to the standards of the Accounting and Auditing Organisation for Islamic Financial Institutions.

All income donated

All non-permissible dividend income (income from non-Shari’ah assets) is donated to charity through the South African Muslim Charitable Trust.

All permissible dividend income (income from 100% Shari’ah assets) from the Old Mutual Gift of the Givers Fund is directed specifically to the Gift of the Givers Foundation. These funds will be dedicated to supporting disaster relief efforts in South Africa. Investors can, therefore, take pride in knowing that their investments support the Gift of the Givers’ life-changing efforts across the country.

Capital appreciation still a target

Over and above donating all income, the Old Mutual Gift of the Givers Life Fund still targets capital appreciation for investors. This is achieved, firstly, through share price movements. In addition, because the fund income is donated, Old Mutual claims the tax rebate on behalf of investors and this amount is re-invested into the fund.

Addressing challenges together

In South Africa, the triple threat of poverty, unemployment and inequality is a barrier that must be breached so that all South Africans may enjoy a better life. However, these threats also present opportunities, such as partnerships that bring diverse expertise. – in this case the Gift of the Givers Foundation, a global disaster relief non-profit organisation and a top wealth investment company in Old Mutual Wealth, as legacies are not built alone.

This is why Old Mutual Wealth’s partnership with the Gift of the Givers Foundation is so inspired.

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