Itransact launches new generation low cost exchange traded funds retirement annuity

“Don’t let the costs of investing cost you your retirement” says Dr Iraj Abedian, well known economist and chairman of Itransact, a South African Exchange Traded Products Investment Platform. He was announcing the launch of a new generation low cost retir

The Itransact retirement annuity is designed to meet the challenge set by National Treasury of providing low cost retirement products which offer the investor a significantly better chance of retiring with a larger amount of capital.

The high costs associated with retirement products are the biggest culprit of retirees not having enough money to enjoy a comfortable retirement, says Dr Abedian. Two simple examples illustrate his point. Costs of 3%, for instance, could erode capital by 31% - a potentially devastating amount for a retiree. Costs of 5% can erode a retiree’s potential capital by 61% - a dire situation. Such costs are particularly consequential for the middle-income and lower middle- income individuals.

Dr Abedian believes that a retirement product with these low costs will be welcome by the National Treasury – especially when compared to most of the traditional retirement products currently available.

The Itransact retirement annuity uses low cost Exchange Traded Funds (ETFs) to create its portfolios. ETFs are listed unit trust funds that track the performance of indices (such as the FTSE/JSE Top 40 Companies Index). They do not try to outperform the indices by attempting to sort out the winning shares from the losing shares.

This passive style of management in ETFs is directly responsible for the low costs offered by the Itransact retirement annuity, confirms Dr Abedian.