How We Build Portfolios.
A disciplined, research-led process — delivered through a range of risk-graded model portfolios built for LifeSense clients in association with Morningstar Investment Management South Africa.
Why model portfolios
Over 1 500 unit trusts. One disciplined process.
The legislative environment and the investment industry are complex, and the pace of change makes it a challenge to stay on top of the technical and administratively cumbersome parts of managing an investment capability while still running a client-centric practice.
Combine that with more than 1 500 registered unit trusts in South Africa, complicated pricing models, and ever-changing markets, and portfolio construction becomes genuinely daunting. That is precisely why we partnered with Morningstar Investment Management South Africa rather than building the capability in isolation.
Together we established a range of portfolios that facilitates the active management of our clients' money, following a strict process in which investments are managed by an investment committee of specialists with proven track records. Model portfolios also bring real benefits in flexibility, liquidity, and transparency.
One of our research partners
Morningstar Investment Management South Africa
We place business across a range of South African insurers, platforms, and asset managers. Morningstar is the research partner behind our model portfolio range specifically — part of the Morningstar Investment Management group, and licensed with the Financial Sector Conduct Authority to provide research-driven, independent investment services locally.
Morningstar has served South Africa from its Cape Town office since 2009 and is known industry-wide as a trusted source of independent investment information. Its South African investment professionals average more than ten years of industry experience, drawing on a global research team of over 100 analysts.
- Independent research, ratings, and manager selection
- Investment committee of specialists with proven track records
- Reduced underlying fund fees negotiated where possible
Morningstar Investment Management South Africa (Pty) Ltd (FSP 45679) is an authorised Financial Services Provider and is the entity providing the advisory and discretionary services.
The process
Rigour before recommendation.
Every portfolio is subjected to both qualitative and quantitative due diligence, so only the best-quality funds reach a client.
Approach
Our disciplined investment process drives portfolio construction. Your risk, return, and time-horizon objectives are analysed first, then matched to investment managers — never the other way round.
- Qualitative and quantitative due diligence on every fund
- Only best-quality unit trusts reach a client portfolio
- Managed by an investment committee of specialists
Asset allocation
Asset allocation is the primary driver of both investment performance and portfolio risk. Capital is allocated across equities, fixed income, property, and cash — locally and offshore — for the diversification each blend provides.
- Each portfolio matched to an end-investor risk tolerance
- Allocation monitored on an ongoing basis
- Underlying managers may move between asset classes as conditions change
Risk management
Specific guidelines constrain risk when portfolios are constructed. Limits are set on the number of funds, the minimum size of a fund, the allocation to any single fund, and the allocation to any one management company.
- Explicit concentration limits at fund and manager level
- Consistency across the range through shared building blocks
- Fundamental characteristics reviewed for allocation changes
Cost and tax
We negotiate reduced fees on underlying funds where possible so portfolios stay cost-effective. Portfolios are actively managed, so changes may trigger capital gains tax — you are told before any change is made.
- Reduced underlying fund fees negotiated where available
- Low-cost vehicles, including index funds, used where they serve best
- Advance communication before portfolio changes, so CGT can be discussed
The LifeSense portfolio range
Four mandates. One for every risk profile.
In selecting unit trusts, the investment committee aims for an appropriate degree of diversification while combining the expertise of quality investment managers.
| Portfolio detail | LifeSenseConservative | LifeSenseModerate | LifeSenseBalanced | LifeSenseAggressive |
|---|---|---|---|---|
| Return objective | CPI + 3% | CPI + 4% | CPI + 5% | CPI + 6% |
| Minimum horizon | 3–5 years | 5 years | 5–7 years | 7–10 years |
| Maximum equity | 40% | 60% | 75% | 100% |
| Target equity | 35% | 50% | 65% | 80% |
| Maximum offshore | 45% | 45% | 45% | 100% |
| Target offshore | 25% | 28% | 35% | 85% |
| ASISA category | SA MA Low Equity | SA MA Medium Equity | SA MA High Equity | WW MA Flexible |
| Regulation 28 compliant | Yes | Yes | Yes | No |
LifeSense Conservative
CPI + 3%Income and conservative capital growth
A multi-asset portfolio focused on capital preservation, aiming for CPI + 3% p.a. over any rolling three-year period. Equity exposure is capped at 40%, and the underlying managers are a complementary mix of styles with an equal focus on protection and growth.
LifeSense Moderate
CPI + 4%Moderate capital growth
Aimed at the moderate-risk investor, targeting CPI + 4% p.a. over any rolling five-year period with equity exposure capped at 60%. Cost-conscious, with the flexibility to use active management where it adds the most risk-adjusted value.
LifeSense Balanced
CPI + 5%Long-term capital growth
A higher risk profile that may invest up to 75% in equities, targeting CPI + 5% p.a. over any rolling seven-year period. Suited to investors with a longer runway who can absorb more short-term variability.
LifeSense Aggressive
CPI + 6%Equity-centric long-term growth
For the high-risk investor: up to 100% in equities and up to 100% offshore, targeting CPI + 6% p.a. over a rolling seven-to-ten-year period. This portfolio does not adhere to Regulation 28 of the Pension Funds Act.
These portfolios are actively managed and changes may be subject to capital gains tax. You will receive communication prior to any portfolio change, giving you the opportunity to speak to your financial adviser about the CGT implications.
Important information
Investments in securities involve risk and will not always be profitable. Neither LifeSense nor Morningstar Investment Management South Africa (Pty) Ltd guarantees that the results of its investment decisions or the objectives of any portfolio will be achieved, or that negative returns can or will be avoided.
An investment may differ substantially from its historical performance, and as a result you may incur a loss. Past performance is no guarantee of future results. The information on this page is provided for informational purposes only and does not constitute an offer to buy or sell a security.
Portfolio mandates shown are as published in the LifeSense Investment Philosophy Document. Speak to your adviser for the current mandate, fee schedule, and platform availability before making any investment decision.
Morningstar Investment Management South Africa (Pty) Ltd (FSP 45679) is an authorised Financial Services Provider. The Morningstar name and logo are registered marks of Morningstar, Inc.