PPS Investments is approaching its 10th anniversary in May 2017, and since inception has developed into a well-trusted mainstream investment business offering investors well-constructed products and portfolios to meet their needs throughout their lifetimes.
During this time, PPS Investments delivered quality investment services to over 32 000 individual investors who entrusted their savings to PPS Investments products. Assets under management have grown to R25 billion at the end of 2016, reflecting the value that our mutual model provides to individual investors.
Building on the success of the range of investment products, two new funds were launched at the end of 2015. The Global Balanced Fund of Funds and the PPS Balanced Index Tracker Fund offer investors diversification across investment styles and geographical focus.
PPS Investments have also launched the PPS Tax Free Investment Account for graduate professionals to meet their needs to build capital through long-term savings. The flexible and unrestricting tax-free investment account allows contributions up to a maximum of R30 000 per tax year and R500 000 over their lifetime.
Retail funds under management increased from R14.8 billion to R17.3 billion on the back of new client inflows of R3.5 billion, slightly ahead of the prior year.
The PPS Tax-Free Investment Account has seen over 700 investments in its first year, as investors have taken advantage of this opportunity.
2016 proved to be a challenging year for the financial markets with political events in Europe and the US having material impacts on the prognoses for global growth and hence, particularly on the emerging markets. The Rand demonstrated surprising strength during the year, particularly against Sterling following the UK electorate’s unexpected decision to leave the Eurozone in the Brexit referendum. Against a low-single digit return environment for the broad local equity market, and after a number of disappointing years, the resources sector enjoyed a notably strong recovery.
The investment approach of PPS Multi-Managers has continued to seek diversified exposure across specifically skilled asset managers; seeking to avoid portfolio construction that is too focused on any one particular outcome or event. As such the multi-asset Funds of Funds enjoyed solid performance relative to peers, whilst the combination of quality managers within the PPS Equity Fund delivered strong returns in excess of its benchmark.
The new portfolios that were launched towards the end of the previous year have started to gain traction as investors have sought diversification on a geographic basis using the PPS Global Balanced Fund of Funds, as well as others who have chosen to diversify into a passively managed Balanced Index Tracker Fund.
During the year, the PPS Managed Share Portfolio offering was extended to post-retirement products – allowing larger investors to invest Retirement Annuity and Living Annuity Assets in bespoke share portfolios having personalised mandates.
The continued focus on providing investors and intermediaries with the ability to access investment information and transact online has seen further developments in this regard throughout the year. At the end of 2016, the first PPS member smartphone app was launched with a strong focus on investments and savings to allow clients to stay in touch with their assets from wherever they are. The ability to access accounts to make additional contributions, to switch between portfolios, and to access savings when needed will further enhance the investor experience that is currently available.
PPS Investments has contributed to the PPS Profit-Share Accounts for the fifth consecutive year. For the 2016 financial year, the aggregate profit allocation totalled R13.2 million, representing 10% growth year on year.
For the third consecutive year, members were eligible for two profit allocations from PPS Investments based on their investment into a PPS Investment product structure and on their investment into PPS unit trusts.
As the business looks forward towards its second decade of operation, the focus will continue to be on meeting the needs of our investors with well-constructed portfolios and products that meet the needs of individual members. The emphasis on quality managers and portfolios that has served investors well over the past decade is a proven recipe for long-term wealth creation through challenging markets and this remains core to our approach.
The introduction of industry-leading digital capabilities for investors and intermediaries is expected to have an increasingly favourable impact on the level of investment of PPS members in the products of this modern investment platform.
|PPS INVESTMENTS||KEY INDICATORS||2016||FIVE-YEAR REVIEW|
|PPS Investments is a 100% owned investment company that offers retirement and savings products to PPS members.||Total assets under management||R25.0 billion|
|New business: flows||R3.5 billion|