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Fundisa education fund declares bonus of R6.3 million in 2013

13 February 2014 Leon Campher, ASISA
Leon Campher, CEO of ASISA.

Leon Campher, CEO of ASISA.

Beneficiaries of the Fundisa unit trust fund had their benefits boosted by a record bonus payment of R6.3-million in 2013. The bonus payment was shared among 24 997 beneficiaries from low-income families.

Fundisa is a public/private sector partnership between the Department of Higher Education and Training, the National Student Financial Aid Scheme (NSFAS) and the Association for Savings and Investment South Africa (ASISA). The five-year old initiative aims to encourage South Africans to save for the higher education of children from low-income families.
 
Leon Campher, CEO of ASISA, says Fundisa’s assets under management grew from R93.8-million in 2012 to R132.4 million at the end of November 2013. The fund attracted 3 302 new investors over this period who are saving towards the education of 4 377 beneficiaries.
 
This is very encouraging, says Campher, especially since Fundisa introduced a means test for beneficiaries at the beginning of March 2013 of an annual household income of R180 000 or less.
 
The means test only applies to the families of the beneficiaries and not to the investors to ensure that high-income earners can invest on behalf of children from low-income families.
 
He explains that anyone can therefore invest on behalf of a child, provided the child comes from a household earning less than R180 000 a year.
 
2013 Benefits
 
Campher explains that when Fundisa was created, all parties agreed that this should be a low-risk investment. For this reason Fundisa was launched as an interest bearing short-term (previously fixed interest income) unit trust fund of funds.
 
In addition to sharing in the R6.3 million annual bonus payment, each beneficiary therefore also benefitted from the 5.2% average return achieved by the Fundisa Fund for the 12 months to the end of November 2013.
 
Together with the bonus allocation, this translates to a total return of 30.2% for 2013 on the first R2 400 invested. While investors can invest more than R2 400 a year, this is the maximum amount that qualifies for the bonus payment, provided no withdrawals are made during the year.
 
An annual bonus payment is not guaranteed, but Campher says as long as there are enough funds the bonus will be allocated annually to beneficiaries who pass the means test. The bonus is funded from Government and private sector contributions.
 
He says that in fairness to those investors who invested in Fundisa before 1 March 2013 for beneficiaries who fall outside the means test, the annual bonus payments will continue as long as there are enough funds, but from grant money sourced from ASISA members.
 
How the bonus grant works
 
Investors in the Fundisa Fund have the benefits of their chosen beneficiaries enhanced by 25% every year to a maximum of R600 per learner. So if you save R200 each month for a beneficiary from a low-income household for 12 months in the Fundisa Fund, you will see the R2 400 investment grow by R600 to R3 000. Furthermore, the R3 000 will also share in the overall investment return achieved by the fund in the next year.
 
The following bonus payments were distributed over the past four years:



What is Fundisa?
 
The Fundisa Fund is administered by STANLIB. The underlying portfolios, which invest in bonds, fixed deposits and other interest earning securities, are managed by selected asset managers.
 
The Fund is open to investors wanting to save for the higher education of a South African citizen or permanent resident who comes from a household earning R180 000 or less a year. A minimum investment of R40 is required. The investor can then choose to pay R40 or more every month or top up the investment when money becomes available.
 
An annual fee of no more than 1.25% (excl VAT) applies, which is taken from the return earned on the money invested. Companies offering the Fundisa fund can discount this fee. A maximum initial fee of 3% (excl VAT) may be charged, but only if the investment is made with the help of an independent financial adviser. Fundisa is available from Standard Bank, Nedgroup Investments, and ABSA.
 
More information is available from the Fundisa web site at www.fundisa.org.za.

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