RAs going into non-compliance for Regulation 28?

Say the rand/dollar exchange rate drops and your overseas unit trust/s goes over the maximum 25% in the RAs overall value. Do they automatically rebalance it at some stage or what does the provider do?

What sometimes happens is that the policy remains unchanged until you request a servicing for any reason, or the policy anniversary comes up.That is normally the case if you are invested in multiple funds that result in a regulation 28 compliant portfolio. If the fund you are in is specifically meant to be regulation 28 compliant then the fund manager should rebalance when necessary.

You Fund Manager should contact you and give you options to rebalance, that's what their fee's are for.
What funds are you invested in?

That Coronation RA is 50% Top20, 25% Global Managed and 25% Bond (R1000, and the minimum per fund is R200). Due to the R falling against the dollar the Global Managed has grown a bit and is just over the 25% foreign bit.

Next year my contribution to it will be doubling and I'll change the fund layout a bit.

How's the performance been compared to the Coronation Balanced plus, which is Reg28 compliant?
My Coronation RA is only in this fund.

Thanks for the answers guys, I'll just wait for them to contact me (whenever that is) and then rebalance everything to the 50% and 25% ratios they should be at.

Its only 3 months old but put in R3000 and its on R3150 (~R70 is from Top20, ~R70 is from Global Manager, and ~R10 from the Bond fund). The 2 unit trusts outside the RA (Emerging Markets and Property) are a R3210 for the R3000 (~R143 from Emerging Markets and ~R67 from Property) put in over the same period.

I'll put Emerging Markets and Property funds into my RA next year when I get an increase and make the contribution R2000pm, maybe at a 50% Top20, 12.5% each into Property, Global Managed, Emerging Markets and Bond. My unit trusts and satrix ETFs are for accessible funds (emergency funds as I continue building up my cash savings as one should) but are also mainly aimed as long term investments for discretionary use at retirement.

Hendrix said:

How's the performance been compared to the Coronation Balanced plus, which is Reg28 compliant?
My Coronation RA is only in this fund.

Click to expand...

The OP is using a asset allocation strategy where he decides on the funds asset allocation, you are using a managed fund solution where you delicate the responsibility to the fund manager. Each has its pro's and con's. Asset allocation requires a high degree of knowledge, but i can have a small cost saving and give a higher degree of return. A managed solution is normally a bit more expensive, but we can leave the decisions to the fund manager.

My only recommendation in your case is diversify. Split the value between other balanced type funds, like Allan Gray Balanced, Stanlib Balanced and Investec Managed. Reason being is that they are managed by people and not every one always gets it right all the time. So for example if the fund manager for Coronation Balanced Plus fund makes a mistake ( for example their inflation linked bonds pull back) then you have the other managers to spread the risk of that happening and visa versa.

Off topic, but important to add I feel.

Good Luck.