liberty evolve investment range evolve investment ran… · this is offered in the form of a...

Liberty Evolve Investment Range

15% P.A. RETURNOR YOU DON’T PAY

01

Picture a world where you only pay a company once they have delivered.Imagine striking oil first, before you have to buy the mineral rights, or only paying your cellphone bill if all your calls and SMSs go through without any loss of signal. In this world you would only pay for an airline ticket once you and your luggage had arrived safely, and on time at your destination. Restaurants and hotels would only charge for a dining experience that ticked all the boxes promised at the outset.

What would investing your hard-earned money in this world look like?

EVOLVE PHILOSOPHY

There would be no upfront deductions to pay your adviser’s initial fees. There would be no set-up costs at this point either.

Your investment company wouldn’t make you pay for theupfront costs until they’ve first worked hard to earn you a healthy return. Most importantly, if your investment didn’t perform in the first few years then you would never haveto pay for those upfront costs.

At Liberty we strive to earn great returns for you. We value the trust you place in us and we’re rewarding that trust with a promise. If we do not earn you the Target Return, each year for the first three years of your investment, you will never be charged for any of the upfront costs including advice fees.

Once your investment earns above the Target Return you’llshare in its growth with us, which is how we’re able to offer you no upfront charges as promised.

Whether you are investing a lump sum for a rainy day or saving for your retirement, the growth sharing feature means you’ll only pay to set up your investment once it has performed.

LIBERTY EVOLVE RANGE

The Target Return will vary from time to time and by product. At the time of going to print the Target Return is 15% per annum for retirement products and 14% per annum for investment products. The Target Return that applies to your investment will be reflected on your quote and once set will not change.

02

IT’S LIBERTY’S RISK IF THE RETURN WE TARGET ON THE CAPPED TRACKER IS NOT ACHIEVED

03

An investment product so advanced you only pay for the initial costs once your investment earns more than the Target Return set by Liberty.You pay through sharing your growth with Liberty (called growth sharing) once this Target Return has been exceeded.So, if you believe that returns in the next few years will be well above the Target Return then this investment is unlikely to be for you.

TARGET RETURN

At a glance

Invest a minimum lump sum amountof R150 000.

Your investment is split between a tracker portfolio(whose performance is capped at the Target Return)

and your choice of portfolios.

You can invest via the Evolve Retirement Annuity,Preserver or Investment Plan.

Instead of paying for upfront costs, you sharethe growth of your investment above the Target Return

for the first three years.

There are no traditional upfront fees or charges, all you pay are low annual maintenance charges plus the possible growth sharing. Liberty adds back your adviser’s initial advice fee on your behalf

-subject to a maximum fee of 3% (plus VAT).


04

HOW IT WORKS

Two portions that work togetherWhen you invest in the Evolve Investment Range we will split your lump sum investment into two portions that work together so you don’t have to pay for any upfront costs until you first receive a great return.

Capped TrackerA 60% portion of your lump sum will be invested into the Capped Tracker portfolio that tracks the ALSI 40 Index (including dividends).

The Capped Tracker return is guaranteed by Libertyto match the return of the ALSI 40 Index (including dividends), but is capped at the Target Return each year for the first three years.

Your portfoliosThe remaining 40% portion of your investment is allocated to your choice of portfolios. There is no capping on this part of your investment, so you enjoy unrestricted returns on any market highs and have the freedom to switch between portfolios as and when you wish, free of charge.

Capped Tracker and your portfolios combined The result is that up to the Target Return all the growth goes to you. Above the Target Return, Liberty retains the Capped Tracker growth and you retain the growth on your portfolios – the combined effect is that you are sharing the growth on your investment with Liberty from this point.

Target Return Capped

Stock market return

After three years the capping falls away and your investment becomes a normal equity tracker. You can then switch into any of the other portfolios free of charge.

Your return


05

Growth sharing at workYou will receive all the growth on your entire investment up to the Target Return.

Once you exceed the Target Return, your Capped Tracker return is capped, but your selected portfolios can continueto grow. So, at this point growth on your total investment is being shared. This is growth sharing at work.

In the unlikely event that the ALSI 40 Index (including dividends) experiences annual growth in excess of 40%, growth sharing falls away and all the excess returns are yours.

So, if your choice of portfolios and the ALSI 40 both produced returns of 17,5% in a year, you would receive 40% x 17,5% plus 60% x 15% (the Capped Tracker’s Target Return) giving you a total return of 16% on your investment for that year after charges and growth sharing.

Yours

Yours

Liberty’s

Yours

Liberty Evolve Investment

Returns are strong, growth all yours from 40%

Growth sharing of returns between you and Liberty

Yours

Your Portfolio Choices

Capped Tracker

Yours

Growth begins

Target Return


06

DON’T PAY UPFRONT COSTSIF YOUR INVESTMENT DOES NOT DELIVER

07

THE DETAIL

A win-win scenarioWe have designed the Evolve Investment Range with you in mind. We wanted to take some of the risk out of investing so you can be more confident that your investment will grow.

That’s why we’re taking the risk on the initial set up cost and advice fees. When your Capped Tracker investment exceeds your Target Return in the first three years we’ll share in the growth to offset the set up costs. If your Capped Tracker never exceeds the Target Return during this period then we will not recoup anything towards those costs.

It is important to note that if the stock market were to rise considerably more than the Target Return over the next three years, your growth sharing could affect your returns more than traditional charging structures.

The total return on your investment is not capped. The cap only applies to the Capped Tracker portion, which still has the potential to grow by at least the Target Return each year.

Risk vs. RewardGrowth sharing may not be the right fit for you if:• Youdon’twanttheriskthatsharingreturnsmayexceedtraditionalcharges.• YoubelievetheALSI40(includingdividends)willperformsubstantiallyabovetheTargetReturnoverthe

nextfewyearsandso,wouldratherpayhigherproductchargesthansharingreturns.


08

Optional guarantees for your investmentYou have the ability to take out optional investment protection on nearly all Evolve portfolios (this does incur an additional charge). See the portfolio choices table on the left. With these investment guarantees your money is safe from losses due to market drops. This is offered in the form of a capital guarantee.

The guarantee allows you to preserve your investment value if the portfolio shows negative returns over 5 years. At the guarantee date you will at least receive your original investment amount (less withdrawals and any ongoing fees paid to your adviser).

The investment guarantee is based on the original amount invested. The amount will change if any withdrawals are madeor if you switch portfolios. Your investment can still growwhile enjoying protection against loss should your investment not have outperformed the minimum guarantee over this guarantee period.

Leaving too soonYou may exit your Capped Tracker portfolio within the firstthree years. If you choose to do so Liberty will levy a growth sharing deduction from your Capped Tracker portfolio. This deduction will only be equal to the market value of the remaining growth sharing when you exit.

The quotation we will provide you with at the time will show you the growth sharing deduction. Your policy document sets out the legal terms and conditions of your policy including details of the growth sharing deduction.

The growth sharing deduction is only applicable to the Capped Tracker portion of your investment and is the only cost you will incur for exiting the investment during the first three years. Thereafter,therearenocostsforwithdrawingyourfunds.

The regulated limitations concerning withdrawals from endowments, retirement annuities and preservers still apply where appropriate.


09

Liberty’s share in your growthThe Liberty Evolve Investment Range offers two automatic safeguard features at no extra charge:

ALSI40Indexrisesbymorethan40%While rare, the impact of growth sharing should the market experience a tremendous year and grow by a substantial percentage could be significant. To mitigate this, once the total return from the ALSI 40 Index (including dividends) reaches 40%, further growth sharing ceases so you will then receive any excess growth for that year.

ALSI40Indexdropsbymorethan30%Future growth sharing is automatically removed if, at either of your investment’s first or second anniversary, the ALSI 40 Index (including dividends) has fallen by 30% or more from the start of your investment. This allows your investment to then recover without growth sharing reducing your returns.


10


Portfolio choice

The Liberty Evolve range of investments offers a select number of portfolios to choose from.

• Afullrangeofrisk-profiledportfolios.• Liberty’spopularpropertyportfolios.• Trackerportfoliosthatareguaranteedtotrack.• Lowmaintenancecharges.• Achoiceofinvestmentmanagers.• Optionalinvestmentguaranteesoncertainportfolios

for additional certainty.

Designed for youInvesting with Liberty is the start of a long-term relationship,a journey towards a financially secure future.

TrackerrangeOur suite of Index Trackers cover equity, bond and cash indices and offer you market exposure at very competitive portfolio charges. They are guaranteed to have no tracking errors. We also provide risk rated combinations for low to higher risk profiles.

Well-managed solutions Our professional and experienced portfolio managers are there to help you realise your investment goals. You can choose froma single manager or a multi-manager approach.

CompetitivechargesChoose the portfolio that best suits your financial needs and goals according to cost and your risk profile. The Evolve Investment Range offers you competitive pricing, for example the Equity Tracker has a portfolio charge of just 0,2% per annum.

11


Your choice of portfolios

• EquityTracker*

• BondTracker*

• CashTracker*

• LowEquityTracker*

• ConservativeEquityTracker*

• MediumEquityTracker*

• BalancedEquityTracker*

• HighEquityTracker*

• LowEquity*

• ConservativeEquity*

• MediumEquity*

• BalancedEquity*

• HighEquity*

• UnlistedProperty*

• ListedProperty

• CPIPlus*

• LowEquity*

• ConservativeEquity*

• Medium Equity*

• Balanced Equity*

• HighEquity*

• AllanGrayBalanced

• AllanGrayEquity

• AllanGrayStable

• CoronationBalanced Plus

• Coronation Top 20

• NedbankRainmaker

*Portfoliosthathaveoptionalguarantees

EVOLVETRACKERS

EVOLVE RISK PROFILED

EVOLVE PORTFOLIOS

EVOLVE MULTI- MANAGER

EXTERNAL MANAGERS

12

FROM THE STARTA MINIMUM OF 100% OF YOUR MONEY IS INVESTED

13

CHARGES

Never pay upfront charges or feesLiberty Evolve Investment Range takes no upfront deductions and guarantees that at least 100% of your investment will be invested (where the initial advice fee does not exceed 3% plus VAT).

The actual initial advice fee is deducted from your investment, but Liberty will add back the standard advice fee(for example 3,42% on the Investment Plan, 2,85% on the Retirement Annuity Plan and 1,71% on the Preserver Plan).In addition, investments over R1 million will receive additional investment bonuses. Any investment over R1 million will receive an extra 1% of allocation and investments over R2,5 million will get 2%.

Liberty Evolve Investment Range offers you the opportunity to invest with no upfront fees, but instead when your investment delivers a healthy return, and only then, you share your additional growth with Liberty.


14

Maintenance chargesThere is a small, platform charge of 0,3% per annum applicable to all portfolios. All portfolios have a portfolio charge thatis specific to your choice of portfolio. For example, the Equity Tracker portfolio has a portfolio charge of only 0,2% per annum.

If you have chosen the Equity Tracker, then your total ongoing maintenance charge will be the platform charge plus the portfolio charge, so 0,3% + 0,2% = 0,5% per annum.

The total 0,5% ongoing maintenance charge is included in the Capped Tracker portfolio prices. So, if your Capped Tracker return shows 15%, then this is the return you will receive. The prices of all the other portfolios just have portfolio charges deducted from them. Where you have agreed to ongoing advice fees, or selected investment performance guarantees, these additional costs will be deducted from your investment.


15

PortfolioCharges

Range

PortfolioPerformancefees:• EvolveCPIPlus

• ExternalManagers

Evolve Portfolios:• CPIPlus• UnlistedProperty

• Listed Property

EvolveMulti-ManagerRiskProfiled:• LowEquity • BalancedEquity• ConservativeEquity • HighEquity• MediumEquity

ExternalManagers:• AllanGrayBalanced • CoronationBalancedPlus• AllanGrayEquity • CoronationTop20• AllanGrayStable • NedbankRainmaker

0,05% -0,2% p.a.

0,8% p.a.

0,2% p.a.

0,9% - 1,0% p.a.

0,9% - 1,0% p.a.

1,4% p.a.

1,1% - 1,7% p.a.

0% - 1,2% p.a.

0% - 3,4% p.a.

LibertyEvolveTrackers:

• EquityTracker• BondTracker• CashTracker• LowEquityTracker

• Capped Tracker

• ConservativeEquityTracker• MediumEquityTracker• BalancedEquityTracker• HighEquityTracker

EvolveSingleManagerRiskProfiled:

• LowEquity• ConservativeEquity• MediumEquity

• BalancedEquity• HighEquity

GuaranteeCharges

0,5% -2,5% p.a.

3,0% p.a.

0,4% -2,7% p.a.

1,0% - 1,3% p.a.

No guarantee

0,5% -3,0% p.a.

No guarantees

Guarantee charges are changed from time to time but will be fixed at outset of your Plan. Your quotation will set out the guarantee charges that apply.


16

IT’S NOT WHERE YOU FIND THE KNOW HOW.IT’S WHERE YOU TAKE IT.

17

INVESTMENT RANGE

The Liberty Evolve Retirement Annuity Plan If you’ve done your planning and secured a reasonable income, then retirement can – and should – be an exciting phase of your life. It’s never too late to start planningand providing for your retirement, but the earlier you start the better.

With Liberty’s guidance and expertise our Liberty EvolveRetirement Annuity Plan, can be harnessed to help you revisit long-held dreams and enjoy a rich life experience.

Retirement annuities are considered to be among the best-performing and best-protected retirement investment solutions available, plus they offer attractive tax incentives.

In addition:

1. You won’t be easily tempted - Access to your retirement savings is limited during your working life, helping you to achieve your retirement goals.

2. You’llpaylesstax- Retirement annuity savings receive tax relief. The growth in retirement annuity savings is also not taxed.

3. You’llhavetheflexibilityofsavingmorewheneveryou want to - Additional premiums are permitted to boost your single premium retirement annuity.

4. You won’t have to give up your retirement savings tocreditors - Creditors1 cannot lay claim to retirement annuity savings.

5. Shouldyoupassaway,yourestateisguaranteedto

receivenolessthantheamountsyou’vesavedin your Liberty Evolve Retirement Annuity Plan.

On retirement

At retirement, up to one-third of the proceeds of your retirement annuity savings can be taken out as a lump sum. You need to use what remains of your retirement savings to buy an annuity that will pay you an income in retirement. You can choose from:

• Lifeannuity,whichprovidesaregularfixedincomeguaranteed for the duration of your life.

• Alivingannuity,whichgivesyoutheflexibilitytochange the amount of income you take every year and to invest in a wide range of portfolios.

• LibertyEvolveRetirementAnnuityPlan• LibertyEvolveInvestmentPlan• LibertyEvolvePreserver

1 Except in cases of divorce or maintenance orders

The Liberty Evolve Range of Investments hasthefollowingproducts:


18

The Liberty Evolve Investment PlanThe Liberty Evolve Investment Plan is a unique offering that gives you the opportunity to invest a lump sum in a range of portfolios. Your investment can be split into a bundle of policies toprovideindividualflexibilityandtheopportunitytofityourfinancial needs.

A bundled investment gives you the freedom to set up your investment across a combination of policies, giving you greater access to your money.Minimum investment amount: R150 000Minimum premiums per policy in a bundle: R25 000Minimum premiums per portfolio: R2 500

Quickaccesstoyourfunds

You can access your funds by taking an advance or surrenderon any of the underlying policies in the portfolio bundle.

• Oneadvanceandonesurrenderareallowedforeach of the policies that form part of the bundle during the firstfiveyears,affordingyouflexibleaccesstoyourfunds.

• IntermsoftheLibertyEvolveInvestmentPlan,theportionnot invested in the Capped Tracker can be accessed at no cost.However,forthefundsinvestedintheCappedTracker, a growth sharing deduction will apply – but only during the first three years.

Taxefficiency

• Taxisdeductedviathefour-fundtaxationapproachthatSARS applies to life policies; this is advantageous for high-net-worth individuals.

• Proceedspayableintermsofthepolicyaregenerallynotsubject to further tax when they are paid out to you as the original owner of the funds.

Tailored for you

There are a number of features that can be uniquely combined to meet your specific needs. You can choose to structure your investment as either:

• Anendowment,withdeathbenefitspayableto nominated beneficiaries.

• AsaSinkingFundthatisidealforpolicyholdersnotlookingfor a death benefit.

Within the bundle, each policy is treated individually and can be separately ceded. Each policy can have different nominated beneficiaries, different lives assured and different portfolios.


19

The Liberty Evolve PreserverWhat is the Liberty Evolve Preserver?Should you need to move your investment from one pension or provident fund to another - due to resignation, retrenchment, dismissal or your fund is winding down - the Liberty Evolve Preserver allows you to preserve your retirement savings without a tax liability.

• Preserve R150 000 or more of your retirement savings.

• Ensurethatyoucontinuesaving towards your retirement goals (after all, it can be tempting to cash in retirement funds, but it makes financial sense to continue investing these funds towards your retirement).

• Receivethehigheroftheamountsyou’vesavedinthePensionandProvidentPreserverandtheinvestmentvalue,should you pass away.

• Takeadvantageofthetaxincentives by saving towards your retirement. By placing funds into a preservation fund, no tax liability will arise on the transfer of the funds into the Preserver.

• Onlypaytaxlater.The amount you choose to preserve incurs no tax. You will pay tax should you withdraw the funds or when you are paid out on retirement.

• Notaxonreturns. No tax is charged on your investment returns.

The Liberty Evolve Preserver offers investors two options:

• Pension Fund Preserver - If you are transferring your funds from a pension fund or another pension fund preserver.

• Provident Fund Preserver - If you are transferring your funds from a provident fund or a provident fund preserver.


20

Liberty Evolve Preserver Benefits

Time To Retire

Onceyou’vereachedretirementage,youretainflexibilitybytailoring your retirement income plan to suit your financial circumstances.

You have three options, subject to the rules of the pension or provident fund:

• Takeacombination of a lump sum and a compulsory purchase annuity.

• Cashinyourbenefitasanafter-taxlumpsum. Tax is likely to be payable on this lump sum and legislative limits apply on the amount that can be taken as a lump sum.

• Purchaseacompulsoryannuity (tax-free transfer).

Added features:

• Dependingonthetransferringfund’srules,youcanmakeone withdrawal prior to your retirement if you have made no previous withdrawals.

• Additionalfundsfromthesametransferringfundcanbeadded to the preservation fund.

ASK YOUR LIBERTY ADVISER OR BROKER ABOUT THE 'OWN YOUR LIFE REWARDS' PROGRAMME.

Funds from approved pension or provident fund

Retirement Benefits

Due to retrenchment, resignation, dismissal or your fund is winding down

Benefits from the transferring fund are preserved

Continue saving towards your retirement goalsAmount you preserve

incurs no tax

Pension Preserver can take one third in cash

(subject to tax)

Dependents receive maximum amount saved in the pension

and the investment value should you pass away

Providend Preserver can take all in cash

(subject to tax)

Pension / Provident Fund Preserver


21

The information contained in this document does not constitute advice by Liberty. Any legal, technical or product information contained in this document is

subject to change from time to time. If there are any discrepancies between this document and the contractual terms or, where applicable, any fund rules, the

latter will prevail. Past performance cannot be relied on as an indication of future performance. Investment performance will depend on the growth in the

underlyingassets,whichwillbeinfluencedbyinflationlevelsintheeconomyandprevailingmarketconditions.Anyrecommendationsmademusttakeinto

consideration your specific needs and unique circumstances. Liberty Group Ltd is an Authorised Financial Services Provider in terms of the FAIS Act (no. 2409).

© Liberty Group Ltd 2012. All rights reserved.

LIBERTYLiberty Group LimitedRegistration number 57/02788/081 Ameshoff Street, BraamfonteinPO Box 10499, Johannesburg 2000

Contact usFor more information please speak to your Liberty Adviser or Broker, contact our call centre on 0860 327 327 or visit www.liberty.co.za

liberty evolve investment range evolve investment ran… · this is offered in the form of a...

Documents