PPS Investments launches Index Tracking Fund

PPS Investments has launched PPS Balanced Index Tracker Fund, a passive portfolio which aims to track the PPS Balanced Index. Duane Littler, Executive of Business Development at PPS Investments, says that the PPS Balanced Index is a customised multi asset high equity composite index that is diversified across a number of constituent indices.

“The portfolio has been constructed as an appropriate Regulation 28-compliant solution for South African investors saving towards their retirement. It is suitable for investors who want to choose their own funds on the PPS Investments platform and combine this index-tracking component with other active managers on the platform, or invest in a stand-alone index-tracking portfolio.”

“In our existing PPS Portfolios, we already make use of tracking solutions where appropriate, and these portfolios continue to be constructed as stand-alone solutions for investors,” states Littler.

Importantly, the index tracked by this portfolio will have a fixed asset allocation that will be rebalanced annually or in order to prevent the portfolio breaching Regulation 28 provisions.

“The portfolio will track the PPS Balanced Index which will be published daily and is diversified across local and global asset classes.” Below Littler provides the constituents and their weightings in the PPS Balanced Index.

He explains that the PPS Balanced Index has performed strongly, relatively to the average active manager over the past five years partly because tracker strategies benefit from momentum-driven markets but also because the PPS Balanced Index has a healthy exposure to SA listed property which has also performed strongly.

“Given its fixed asset allocation, the PPS Balanced Index should perform relatively better in periods where active managers struggle. There will be times when the PPS Balanced Index will underperform active managers, but we believe a portfolio tracking this index will provide a useful diversification for investors seeking to combine active managers with a core tracking portfolio in the solutions they construct,” concludes Littler.