Retirement annuity planning: Finding the right 10X fund for you

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Deciding to invest in a retirement annuity is a great first step tothe retirement you want, but to get the most out of it, you would want to ensure that you make the right fund choices for you and your unique situation. Often, South Africans decide to start a retirement annuity without realising the importance that fund selection can have on the long-term performance of this investment.

10X offers an attractive range of well-diversified and cost-effective funds, with a variety of different risk levels, therefore catering to the needs of a wide range of investors. This article will help steer you to the 10X fund that best suits your risk profile, investment timelines, financial situation and long-term goals, to help ensure the most efficient use of your savings.

Understanding retirement annuities

A retirement annuity (RA) is a long-term retirement savings investment with tax benefits, making it a popular choice amongst investors. Contributions that you make to your retirement annuity are tax-deductible to certain limits. These limits are up to 27.5% of your income and up to R350,000 per annum. Investment returns within the RA wrapper are also exempt from income tax, dividends tax and capital gains tax while invested.

This means that you may have potentially more returns to compound and grow over the long term. A retirement annuity can be a useful investment for those who are self-employed or without an employer-sponsored pension or provident fund. The contributions that you make to your RA may be either in the form of lump sum contributions or in the form of monthly contributions, such as via a monthly debit order. Of course, you can also pause or amend a monthly debit order to cater to any changing financial circumstances.

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Upon retirement, currently from age 55 in South Africa, a retirement annuity is used to purchase either a living annuity or a life annuity. This annuity will then provide you with an income for your retirement years.

Fund selection and asset allocation in a retirement annuity

An important factor in the performance of your retirement annuity over time rests on the asset allocation that you choose. Asset allocation plays the biggest role in the performance of your retirement annuity, accounting for over 90% of returns, as this seminal research from Brinson, Singer, and Beebower shows.

Asset allocation is the mix of the different asset classes that your retirement annuity capital is invested in. These are typically equities, real estate, bonds and cash. As an investor with 10X, you have the freedom to customise your underlying portfolio by choosing from a selection of carefully curated funds, each with a different asset allocation, geared towards different investor profiles. Your particular profile is suggested by your risk tolerance levels, investment timelines and your long-term financial goals.

Equities are the most volatile of the asset classes, but are also likely to generate the best returns in the long term. Equities have historically produced returns above inflation, by around 7% annually, over the long term (based on JSE All Share Index performance versus CPI from 1960-2020) - however, past performance does not guarantee future results. Bonds are typically more stable than equities, but will most likely generate lower returns. Real estate (property) can be a good hedge against inflation. Cash will generate the lowest returns while also being the most stable of the asset classes.

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Let’s look at an example. A younger investor who has more time and is looking at a longer investment timeline may wish to include a higher percentage of equities in their portfolio. In comparison, an older investor, who is closer to retirement age and less risk-tolerant, may opt for a more conservative portfolio, with a lower percentage of equities and more defensive assets, such as bonds and cash.

A well-diversified fund should optimally balance risk against return. Diversification allows you to potentially take advantage of gains in certain asset classes, while also mitigating against losses that may occur in other asset classes. Further diversifying your portfolio offshore, in accordance with Regulation 28 requirements limits, could allow for further opportunities that may be on offer in the international market. Offshore exposure also provides a hedge against any local market instability and depreciation of the Rand.

All retirement investment products are subject to Regulation 28 of the Pension Funds Act. This regulation was implemented to ensure investors have a well-diversified portfolio which includes a mix of different asset classes. Current regulations put a limit on the percentage of your retirement annuity that you may invest in both equities and offshore funds. This limit is currently 45% for offshore investments and a limit of 75% for equities.

10X offers a range of well-diversified, Regulation-28-compliant funds that cater to the needs of different investors, such as different timelines and risk tolerance levels. These funds are composed of assets from a variety of asset classes and also include offshore exposure.

Understanding 10X’s investment philosophy

10X has a tried and tested investment philosophy. We simplify investments with low fees, a superior track record and a straightforward investment approach.

Index-tracking: At 10X, we make use of an index-tracking investment strategy alongside a more active approach to asset allocation, in a buy-to-hold investment strategy geared towards long-term returns that produce the investment and retirement outcomes our clients deserve.

Low fees: With fewer trading activities and research overheads than an active fund manager, there are fewer costs to be passed on to the investor. At 10X, fees are less than 1% for most retirement products, depending on the product selected and the amount that is invested.

Offshore exposure: Our globally diversified funds provide protection against any local instability which may occur, as well as hedging against any depreciation of the Rand.

You can learn more about our investment strategy here.

Overview of 10X’s retirement annuity fund range

10X offers a range of funds within the retirement annuity wrapper. Let’s have a look at some of the funds on offer:

10X Your Future Fund

This 10X flagship fund provides a mix of both local and international assets, and a higher percentage of growth assets. This fund is well-suited to an investor looking to grow their capital over the long term. With the 10X Your Future Fund, you gain diversified exposure to multiple asset classes and geographies. You would ideally look at an investment period of at least 5 years. Fund exposure is 64% local and 36% offshore.

The 10X Your Future Fund has delivered an annualised return of approximately 11.2%. Over shorter periods, the fund returned around 13.9% over the past year, 16.1% p.a. over three years, and 13.8% p.a. over five years. Information is correct as of September 2025.

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10X Income Fund

The 10X Income Fund is another one of our flagship fund options. This cost-effective fund provides the investor with exposure to a wide range of both local and international interest-bearing assets, offering both capital stability and a high level of income. It is best suited to a 3-year or longer time horizon. Fund exposure is 84.4% local and 15.6% offshore.

The 10X Income Fund has delivered an annualised return of approximately 10% since its inception. Over the past year, the fund returned around 8.9%. Information is correct as of September 2025.

10X Moderate Fund

This is a medium to long-term fund best suited to investors who want capital growth with a lower level of volatility than a high equity portfolio over the medium to long-term. This fund offers cost-effective exposure to a range of local and international asset classes. The Moderate Fund has a higher allocation to growth assets, like shares and property, than to defensive assets, like bonds and cash. The recommended time horizon is 3 years or longer, as returns may be volatile over the short term. Fund exposure is 66.1% local and 33.9% offshore.

The 10X Moderate Fund has delivered an annualised return of approximately 9.9% since inception. Over shorter periods, the fund returned around 12.6% over the past year, 14.9% p.a. over three years, and 12.7% p.a. over five years. Information is correct as of September 2025.

10X Defensive Fund

The 10X Defensive Fund is suited to investors looking for capital growth with low volatility over the medium term, achieved via cost-effective exposure to a range of local and international asset classes. The portfolio has a greater allocation to defensive assets, such as bonds and cash, compared to the percentage of growth assets like shares and property. The recommended time horizon is 1-3 years and longer, as returns will be volatile in periods shorter than 1 year. Fund exposure is 72% local and 28% offshore.

The 10X Defensive Fund has delivered an annualised return of approximately 8.7% since inception. Over shorter periods, the fund returned around 10.3% over the past year, 12.6% p.a over three years, and 10.5% p.a. over five years. Information is correct as of September 2025.

10X Money Market Fund

The 10X Money Market Fund is best suited to investors seeking income and capital preservation, offering a balanced and diversified mix of short-term interest-bearing money market investments and short-term bonds. Fund exposure is 100% local.

The 10X Money Market Fund has delivered an annualised return of approximately 7.1% since inception. Over shorter periods, the fund returned around 7.8% over the past year and 8.1% p.a. over three years. Information is correct as of September 2025.

Matching fund choice to your risk profile and time horizon

As mentioned, when choosing your fund selection, the idea is to align this with your risk profile, time horizons and long-term financial goals. Consider the following:

• Risk profile: This refers to your capacity and willingness to tolerate investment risk. Capacity refers to your financial ability to deal with market downturns, while willingness refers to your emotional comfort with market volatility. It is important to understand your risk profile, as mismatched risk exposure can lead to poor investment decisions during periods of market distress.
• Time horizons: Your investment time horizon refers to the length of time before you plan to retire or begin withdrawing from your retirement annuity. A longer time horizon allows you to ride out short-term market swings and invest in higher growth funds. Gradually shifting to a more conservative portfolio as you approach retirement can help you preserve capital.
• Long-term financial goals: Your goals determine what you want your investment to achieve. Are you looking for high returns, or is preservation of your funds more important? Those focused on long-term growth may benefit from equity-heavy funds, while investors prioritising stability and income might prefer balanced or income-focused funds.

At 10X, our simplified and transparent fund options ensure that fund selection is not overcomplicated for the investor, while also focusing on long-term superior returns for our clients. Reviewing your retirement annuity annually, as well as after any major life events, is an important part of managing your retirement annuity. This allows you to adjust fund selection in accordance with any changes to your risk tolerance levels and long-term financial goals.

The impact of fees and compounding on fund growth

Fees may play an important role in the compounding growth of your investment over time. High fees may mean there are fewer returns to be reinvested and allowed to potentially grow over time. Lower fees may mean there are more available returns to potentially compound and grow your capital. There are some typical fees that you may see charged on your retirement annuity. These are the following:

• Administration fees: The fees you will see charged for administration tasks. These will be for tasks such as reporting, tax and compliance.
• Management fees: These are the fees charged for the management of the fund.
• Advisor fees: An advisor will charge for their advice. You may see both an initial and an ongoing fee deducted.
• Other: There may also be other fees, such as exit fees, deducted from certain products.

As an investor, it’s incredibly important for you to review the fees that you are paying each year. You can do so by reviewing the Effective Annual Cost (EAC) of your RA. This refers to the total fees and costs associated with owning an investment over a one-year period of time. Your EAC can be found on your investment statement or requested from your service provider. You can use this calculator offered by 10X to help you evaluate and compare the EAC of your current account with that of 10X. This EAC calculator is a part of our free online suite of tools available to investors.

All factors being equal, you may find that a higher EAC means that there are fewer returns to be reinvested and allowed to compound over time. A lower EAC may mean that there are more returns available to be reinvested and allowed to compound over the long term. The EAC of your investment would be just one factor to consider when evaluating service providers.

Let’s look at an example to help illustrate the effect of fees on your real investment value.

We will assume the following factors:

• Investment period of 20 years
• Initial lump sum investment of R300,000
• Monthly contributions of R10,000
• Return of 12% per annum
• An inflation rate of 6%

Example 1 (0.86 % Fees): Real investment value is approximately R3,442,000

Example 2 (3% Fees): Real investment value is approximately R2,775,000

We can see how just a small difference in fees can lead to a major difference in retirement outcomes. This example is for illustrative purposes only, and actual results may vary. You can learn more about fees here.

Final thoughts on retirement annuity planning

The right fund for you is the fund that aligns best with your risk tolerance levels, investment timelines and long-term financial goals. Making the right choice early on can have a powerful impact on your retirement outcome, as even small differences in returns and fees can compound significantly over time.

At 10X, we have a range of well-diversified, Regulation 28-compliant funds across varying risk levels. Our index-tracking approach, transparent fee structure, and global diversification work together to help investors achieve sustainable, inflation-beating returns.

Our platform is easy to use, and our skilled investment consultants are here to assist you with any questions that you may have regarding the 10X funds on offer. Begin your journey to a secure future with 10X Investments. Get in touch today to learn more.