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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 18% for both its Special Investment Plan (SIP) and Education Savings Plan. This is a 2% increase from the 16% declared in February 2015.

“The Special Investment Plan (SIP) and Education Savings Plan have seen exceptional performance over the past two years since Old Mutual’s entry onto the Ghanaian market,” says Emil Clive-Plange, Head of Retail at Old Mutual.

Clive-Plange adds that these good bonuses demonstrate how Old Mutual’s customers enjoy the good returns when market perform well, but are well protected when the market fall sharply.

Evidently we are allowing our customers to maintain the long-term view on their investments and not worry about the short-term disruptions in the market. In essence, the SIP and Education Savings Plan are savings vehicles aiming to provide superior long-term interest rates while providing the customer protection when the market falls sharply.

Erich Gariseb, Actuarial Executive at Old Mutual, adds that Old Mutual is renowned for its Smooth Bonus products across the continent and has helped millions of its 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 Gariseb. These bonuses are smoothed over time, which means they are not as volatile as the actual market returns.

The SIP and Education Savings 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 corporate, especially if they do not want to see their investment experience sharp ups and downs as the market changes. Generally these customers would consider putting their money in low-risk instruments (such as money markets or leave it in a bank 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.

Gariseb concluded by stating 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.

Head of Distribution, Linda Mariwande, adds that 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.

Old Mutual provides investment, savings, insurance and banking services to more than 17 million customers in Africa, the Americas, Asia and Europe. Started in South Africa in 1845, with operations and listings in many countries in Sub-Saharan Africa, Old Mutual has been listed on the London Stock Exchange since 1999.