Old Mutual’s range of smooth bonus funds has continued to deliver, despite the challenging economic climate and rising inflation. The company declared a total bonus of 15% for both its Special Investment Plan (SIP) and Education Savings Plan. A total monetary value of GHs 12,489,080 was applied to all savings products.
“The Special Investment Plan (SIP) and Education Savings Plan have seen exceptional performance over the past two years since Old Mutual’s entry into the Ghana market,” says Emil Clive-Plange, Head of Retail at Old Mutual.
Emil Clive-Plange adds that these good bonuses demonstrate how Old Mutual’s customers enjoy the good returns when markets perform well, but are well protected when the markets fall sharply. Evidently we are allowing our customers to maintain the long-term view on their investments and not worry about the short-term noise in the market. In essence, Smoothed Funds are savings vehicles aiming to provide superior long-term interest rates while providing the customer protection when the markets fall sharply.
Tavona Biza, Group CEO at Old Mutual Ghana, adds that Old Mutual is renowned for its Smooth Bonus products across the continent and has helped millions of our customers meet their long-term savings needs, be it retirement planning, saving to buy a house, children’s education, take a family holiday, etc. This year we managed to beat inflation over the same period, giving our customers real growth in their savings.
We earn returns on the underlying assets and then declare annual bonuses to pass the returns to customers, says Tavona. These bonuses are smoothed over time, which means they are not as volatile as the actual market returns. The SIP and Education Plan hold back some of the investment growth during times of strong market performance and allocate additional growth during times of poor market performance, thus smoothing out the short-term ups and downs of the market. For customers, this means more peace of mind when it comes to their savings.
Smooth bonus funds are a good choice for many individuals and corporates, especially if they do not want to see their investment experience sharp ups and downs as markets change. Generally these customers would consider putting their money in low-risk assets (such as money markets or leave it in a bank savings account), which means they forego better growth.
Of course, it’s not only about the last year – investing is a long-term commitment. Special investment Plan (SIP) and Education Savings Plan are a good long-term investment option for investors saving towards a long-term goal. Tavona also stated that these products aim to outperform inflation over the long-term but the current inflation pressures will continue to erode the value of customers’ savings if savings products in the market do not keep up with the rising inflation rate.
Tavona, concluded by saying investment markets can be a tricky road to navigate on your own, with hazards abounding – now more than usual. Any journey will have some bumps in the road. But when it comes to your lifetime savings, you want to know that you have a rock-solid plan and a partner you can trust to help you reach your financial goals. Our Special Investment Plan (SIP) and Education Savings Plan are well positioned to navigate these challenging times, making us the ideal partner that you can trust on your savings journey.