The true impact of investment fees
#StopDaylightRobbery
10X Moneyweb webinar
Ryk van Niekerk, Moneyweb
Steven Nathan, 10X
Tracy Jensen, 10X
18 October 2016
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Content
Types and size of total investment fees
Fee impact and a fair fee
Don’t higher fees equal higher returns?
How can I do better?
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SA investment industry:
Complex, expensive, underperforming & opaque.
National Treasury Retirement Reform
SA has high fees & poor disclosure
80% of SA managers underperform
in SA & 97% Globally
December 2015
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1. We pay for services we don’t need
Services needed?
Other fees:
Advice & Plan
Performance fees
Hedge fund fees
Fund of fund fees
Guarantee fees
Termination fees
Investment
Services provided & average fees % assets
Advice
Administration
Investments
Fees: 0.75%
1.5% to 2%
0.5%
3% incl. VAT
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2. Fees average 3% in SA vs. Return of CPI +6.5%
Total investment fees % investment
Source: National Treasury, Morningstar, 10X estimates
• Fair total fees: 1% or less
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3. 2% higher fees “steals” 40% of final pension
fund
Final investment value after 40 years in today’s money: R’million
Assumes: Saving R3,000 pm, 40 years, Return CPI+6.5% pre fees. 10X max fee of 1%, Industry average fees
3%. Source: National Treasury, Morningstar, 10X estimates
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3. Higher fees equal lower returns. Morningstar research
• Most active managers underperform
• No broker can reliably pick winning funds
Source: Standard & Poors
Most investors are better off
owning low cost index funds.
Warren Buffett
With investing, YOU get what you don’t pay
for
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10X vs Large Active Manager survey to 30 June 2016: Pre fees
7 year return comparison of high equity balanced funds (% pa)
1.1%
-3.5%
Source: Alexander Forbes Global Manager Watch, 10X Investments
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How can I do better? Educate & empower
yourself
Do active
managers
outperform? Ask
Google
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Do investment
consultants add
value?
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Be victorious, not a victim
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10X’s proud track record
• Admin. & investment management for retirement & general investing
• One solution for all clients:
Time driven investment portfolios
Index funds
Low fees
• Online retirement planning and goal tracking
• Easy access to fund info, full transparency
• Shareholders include Old Mutual Private Equity
• Multiple awards: Admin, investments, IT
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Thank You
Disclaimer
Disclosures in terms of Financial Advisory & Intermediary Services Act (FAIS)
10X Investments is a Licensed Financial Services Provider (#28250), authorised to provide investment products including retirement
annuities, preservation funds and pension funds.
10X does not provide advice as defined by the Financial Advisory and Intermediary Services Act (FAIS). 10X does not conduct a financial
needs analysis and does not consider alternative products or product providers.
Steven Nathan is registered as a Key Individual for 10X with the FSB. Steven has over 15 years experience in financial services, and was
previously a managing director at Deutsche Bank in SA and London and holds the following qualifications: Bcom, CA (SA), CFA.
As an authorised Financial Services Provider, 10X may not request or induce in any manner a client to waive any right or benefit conferred on
the client by or in terms of any provision of the General Code of Conduct, or recognise, accept or act on any such waiver by a client.
Investment risk is associated with investing in the 10X Retirement Funds. The investment return is not guaranteed, it depends on the returns
generated by the underlying investments in the financial markets. These returns change on a daily basis and may be positive or negative.
10X Investment’s compliance is outsourced to Independent Compliance Services (Pty) Ltd, an independent company that is regulated by the
Financial Services Board. The Compliance Officer is Enrique Goosen who can be contacted at 021 975 6597.
10X Investments holds Professional Indemnity insurance.
Cape Town
Johannesburg
10X Investments (Pty) Ltd
Suite 105, Foyer A, Sovereign Quay,
34 Somerset Road,
Green Point, 8005
Tel: 021 412 1010
www.10X.co.za
10X Investments (Pty) Ltd
Block D, Upper Grayston Office Park
152 Ann Crescent, Sandton
Johannesburg, 2031
Tel: 011 685 1300
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Index fund’s indices tracked
Asset Class
SA shares
Index
Description
SA bonds
SA cash
Low
Equity
50%
36%
17.5%
22%
14%
7.5%
Top 60 listed shares on JSE
Max exposure of a single share capped at 6%
FTSE Global All-Cap Index
7 000 global stocks
FTSE Emerging Index
1 000 Emerging Market stocks
10X SA Property Index *
Top 14 property shares on JSE
5%
10%
6%
Total growth assets
77%
60%
31%
Most liquid and tradeable nominal SA
Government bonds
Most liquid and tradeable inflation-linked SA
Government bonds
12%
15%
19.5%
Money market fund
8.5%
19%
41%
Overnight USD cash account
2.5%
6%
8.5%
Total defensive assets
23%
40%
69%
100%
100%
100%
JSE South Africa Government
Bond Index
Barclays/ABSA SA Government
Inflation-linked Bond Index
Alexander Forbes Short Term
Fixed Interest Index (3 month)
International cash USD Cash
Total assets
Medium
Equity
10X Top 60 SA Share Index *
Global shares
SA property
High
Equity
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10X vs other high equity balanced funds
10X track record starts here
Global financial
crisis
Source: 10X Investments, Alexander Forbes Large Manager Watch, gross returns for period ending June 2016
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