Why a Volatile RA Fund May Be the Best Gift You Give Your Future Self

Contact your Multivest advisor today to align your retirement strategy.

When you’re young and contributing monthly to your Retirement Annuity (RA), it’s perfectly normal to want stability. Market dips can feel scary, and the idea of a conservative, “safe” fund might sound comforting. But when it comes to building real, long-term wealth - especially over decades - short-term calm often comes at the cost of long-term growth.

The truth is: if you’re in your 20s, 30s or even 40s, time is your greatest asset - and an aggressive, equity-heavy Regulation 28 fund could be the smartest place to put your RA contributions.

Why Choose an Aggressive Fund?

Aggressive funds invest more in equities (shares), which are naturally more volatile. But they also historically deliver significantly higher returns over the long term compared to conservative funds, which focus more on bonds and cash.

Example:

Let’s say you invest R1,000 per month for 30 years:

                •              In a conservative fund (average 6% p.a.): ~R1.0 million

                •              In an aggressive fund (average 11% p.a.): ~R2.5 million

That’s a R1.5 million difference - just from your fund choice.

What About Market Volatility?

Here’s where Rand-cost averaging becomes your ally.

Because you’re investing the same amount each month, you automatically buy more units when prices are low and fewer when prices are high. Over time, this averages out your buying price and helps reduce risk.

For example:

                •              Month 1: Unit price = R10 → you buy 100 units

                •              Month 2: Unit price drops to R8 → you buy 125 units

                •              Month 3: Unit price rises to R12 → your buy 83 units

o   You now own 308 units X R12 = worth R3,696 (for only R3,000 contributions)

That’s the power of consistent saving in a volatile market.

Final Thought

Your RA is a long-term investment - not a sprint, but a marathon. Choosing an aggressive fund early on and sticking with it through the market’s ups and downs can give your retirement savings the fuel it needs to grow meaningfully.

So be patient, stay the course, and don’t fear a bit of volatility.

Your future self will thank you.

Contact your Multivest advisor today to align your retirement strategy.