PPS Integrated Report 2021 209 | Notes to the Consolidated Financial Statements DPF and Investment policies Group excluding Investment Choice Investment Choice (DPF) 2020 R'm % R'm % Local Equity 13 375 50.2 1 565 27.9 Fixed interest 4 082 15.3 2 980 53 Cash 1 738 6.5 300 5.3 International Equity 7 440 28.0 772 13.8 Total 26 635 100.0 5 617 100.0 The assets held to back the non-DPF component of the liabilities similarly reflect the Group’s risk appetite and the results of the asset liability modelling exercises undertaken in the past. Investment profits or losses arising from the impact of fluctuations in market values of assets and interest rates on the value of assets and non-DPF policy liabilities will be transferred to policyholders by adjusting the allocations made to the DPF component of their benefits. Younger policyholders have more time to recover from the volatility in the financial markets. For that reason the strategic asset allocation for the invested portfolio representing these policyholders has a higher exposure to equity and thus risk. Older policyholders have less time to recover from negative market performance, and are thus given a voluntary option each year to switch to more conservative investment portfolios from age 55 (‘Investment Choice’), i.e. portfolios where there is reduced exposure to equities. The assets held to back the non-DPF component of the policy liabilities are as follows: 2021 2020 Group R'm % R'm % Local Equity 646 12.3 540 10.4 Fixed interest 3 909 74.4 3 923 75.8 Cash 42 0.8 29 0.6 International Equity 657 12.5 680 13.2 Total 5 254 100.0 5 172 100.0 The assets backing the non-DPF liabilities are invested in such a manner as to try and minimise the asset liability mismatch for interest rate risk and duration risk.
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