Old Mutual Wealth expands tax-free options with tailored fund portfolios

Investors targeting a specific investment goal or wanting to diversify their investments offshore will be pleased to know that Old Mutual Wealth Tailored Fund Portfolios (TFPs) can now be used for tax-free savings. TFPs are the Discretionary Fund Management offering by Old Mutual Wealth that creates and manages a range of solutions in order to provide investors with a reliable approach to investment.

Kim Rassou, Portfolio Manager at Old Mutual Wealth

According to Kim Rassou, Portfolio Manager at Old Mutual Wealth, TFPs – through a consistent investment process of asset allocation and manager selection – provide a range of solutions to meet clients’ every investment objective.

Rassou says, “Investors can now select a solution from either the inflation-targeting range or the rand-denominated offshore offering for tax-free investments”.

She adds that making the range available for tax-free savings provides retail investors with a full suite of solutions to manage their investment goals.

“An integral part of our investment process is that we aim to control our model portfolios’ costs. As such, we prioritise not investing in funds that charge performance fees, thus making them suitable for tax-free savings.

“We’re extremely pleased to offer financial advisors these additional options for their clients who wish to take advantage of the tax-free benefits available under this scheme. Our model portfolios are made up of specialist building blocks that cater to a range of investment goals and risk appetites.”

National Treasury introduced tax-free savings in 2015 as a means to encourage a greater savings culture. Under this programme, investors are permitted to save R36 000 annually and R500 000 in their lifetime into designated funds on which they are exempt from tax on interest earned, capital gains, and dividends.

“Whether your client is targeting a specific investment goal or wants to diversify their investments offshore, this development allows them to use their annual tax allowance to access a cost-effective managed solution. Investors have the option of a making a lump sum contribution or a monthly debit order,” Rassou says.

The domestic range covers a wide range of investment needs. The tax-free investment options include i) two income strategies for clients who are concerned about capital protection, ii) a suite of inflation-targeting funds that aim to beat inflation in single-digit increments from CPI +3% to CPI + 6% over the medium- to long-term investment horizon; and iii) a rand-denominated offshore model portfolio range that provides global diversification. This is particularly suitable for clients who prefer to spread their risk by allocating capital to global markets without having to apply for reserve bank approval. This offering makes it affordable and accessible for anyone to invest offshore.

Rassou adds that all funds are multi-managed by specialist asset managers. In this way, TFPs are able to combine both active and passive funds, to control costs, and to manage the risk and return outcome.



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