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Endowment Plan
An endowment is a tax-efficient investment plan with a built-in life insurance benefit. It is suited to investors with a high marginal tax rate who are comfortable with limited access to their capital for the first five years.
It’s also available to companies, close corporations, and other legal entities.
How it works
You can open a Coronation Endowment plan from as little as R500 a month or a minimum lump sum of R10,000 using our online Invest Now process.
Before you invest, you will need to choose a fund that matches your investment goal or need. Your fund choice is not subject to any regulatory or asset class limits; however, your fund must be a rand-denominated unit trust.
Initial restriction period
The Coronation Endowment Plan has an initial restriction period of five years. You may make additional contributions to your plan at any time (minimum R5,000 lump sum). However, if your contributions exceed 120% of the greater of your annual contributions in the prior two years, your investment will enter a new restriction period of another five years from the date of the additional contribution.
EXAMPLE:
Flat tax rates
The appeal of endowments lies in the flat tax rates that apply to income and capital gains. Both taxes are deducted from your investment within the endowment and paid to SARS on the investors’ behalf. Income is taxed at 30% (compared with a marginal individual tax rate that can be as high as 45%), while capital gains are taxed at 12% (compared with an effective rate of 18% for individuals in the highest income tax bracket).
An endowment plan is also structured to include a built-in life insurance benefit. This ensures that in the event of death, the market value of the endowment is paid to beneficiaries that you have nominated.
Why a Coronation endowment makes sense for you
The Coronation Endowment Plan is flexible, cost-effective, and transparent.
It is designed to allow you to stop and restart your contributions and/or switch between investment options as your circumstances change. We do not charge initial fees, and the fees of each of the underlying unit trust funds are fully disclosed.
What are the benefits and limitations?
Here’s a summary of the key benefits and limitations of a Coronation Endowment Plan.
Benefits
- Invest from as little as R500 a month or a lump sum deposit of R10,000
- Choose from our range of rand-denominated unit trust funds (no regulatory limits apply)
- Stop, restart and/or switch at any time
- No initial fees or administration fees
- You can make unlimited withdrawals from your investment after the expiry of the initial restriction period or an extended restriction period
- May be ceded as collateral or transferred to a third party at any time
- Upon death, the proceeds of your investment (minus the capital gains tax withheld) will flow directly to your nominated beneficiaries
Limitations
- You cannot transfer an existing endowment between different service providers
- Five-year restriction period
- You may only make one withdrawal from your plan during the restriction period, limited to the lesser of the market value of your investment or your total contributions +5% compound interest.
Funds
What are my investment options?
You may choose any fund from our range of rand-denominated unit trusts given that no regulatory limits apply.
Popular choice
Balanced Plus
This fund is our flagship fund for retirement savers. It reflects our core house investment view within the constraints that govern retirement savings. It invests in a combination of shares, bonds, property, and cash - locally and globally - with a strong focus on growth assets to maximise long-term returns within an endowment.
- Seeks strong long-term growth
- Invests across shares, bonds, property, and cash, locally and globally
- Foreign exposure limited to 45%
Risk rating
Minimum investment term
5 years +
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Balanced Plus
The fund aims to achieve the best possible investment growth for retirement savers (within the constraints of Regulation 28 of the Pension Funds Act) over the long term.
Investor profile
The fund is suitable for investors: Building up long-term retirement capital. Requiring a moderate capital growth portfolio. Looking to preserve the purchasing power of their capital over the long-term, but not prepared to accept the short-term turbulence of the equity market. With a time horizon of five years or longer.
Benchmark
South African – Multi-asset - High Equity ASISA fund category average (excluding Coronation funds)
Risk rating
Minimum investment term
5 years +
Exposure to growth assets
Maximum: 85%
Annualised past performance (after fees)
| Returns | Fund | CPI + 5% | PEER GROUP AVERAGE |
|---|---|---|---|
| Since Launch (unannualised) | 4,440.2% | 2,015.9% | 2,891.2% |
| Since Launch (annualised) | 13.8% | 10.9% | 12.2% |
| Latest 20 years (annualised) | 12.0% | 10.4% | 9.9% |
| Latest 15 years (annualised) | 11.1% | 10.0% | 9.6% |
| Latest 10 years (annualised) | 9.7% | 9.8% | 8.4% |
| Latest 5 years (annualised) | 15.0% | 9.9% | 12.8% |
| Latest 3 years (annualised) | 18.5% | 9.1% | 15.5% |
| Latest 1 year | 21.5% | 8.1% | 15.1% |
| Year to date | 17.3% | 6.9% | 13.4% |
Global Equity Select [ZAR] Feeder
This fund suits investors seeking long-term growth from global equity markets. It invests in attractively priced businesses across developed and emerging economies. It’s a suitable fund for investors wanting pure offshore equity exposure within their endowment and diversification while investing in rand.
- Focused on long-term capital growth from a diversified portfolio of global shares
- May hold limited cash or bonds when opportunities are scarce
- Predominantly invested in developed markets with exposure to emerging markets
Risk rating
Minimum investment term
10 years +
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Global Equity Select [ZAR] Feeder
The fund aims to give investors access to the best opportunities in global equity markets. The fund is biased to developed markets and actively seeks out attractively valued shares to maximise long-term growth. Our intent is to outperform the global equity benchmark over all periods of five years and longer.
Investor profile
The fund is suitable for: Investors who are building wealth, and are comfortable with full exposure to shares listed in global markets outside South Africa. Accept that the fund may underperform the market significantly in the short term in pursuit of superior long-term gains. Hold other investments and are looking to add exposure to global equity markets. Do not require an income from their investment.
Benchmark
MSCI All Country World Index
Risk rating
Minimum investment term
10 years +
Exposure to growth assets
Maximum: 100%
Annualised past performance (after fees)
| Returns | Fund | BENCHMARK | OUTPERFORMANCE |
|---|---|---|---|
| Since Launch (unannualised) | 208.4% | 298.4% | (90.0)% |
| Since Launch (annualised) | 11.4% | 14.2% | (2.8)% |
| Latest 10 years (annualised) | 13.4% | 14.4% | (1.1)% |
| Latest 5 years (annualised) | 12.7% | 14.2% | (1.5)% |
| Latest 3 years (annualised) | 26.1% | 21.2% | 4.8% |
| Latest 1 year | 40.7% | 17.3% | 23.5% |
| Year to date | 19.6% | 8.6% | 11.1% |
Popular funds
See all popular Coronation unit trust funds suitable for Endowment Plans
Invest Now
Experienced investors or those who prefer to build a custom portfolio can use our Invest Now process designed to meet every need.
Investment quote
Create a summary of your prospective investment. This is a useful document for comparisons prior to investing.
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Frequently asked questions
You may select from a wide range of Coronation unit trust funds.
Yes. You can make contributions at any time, subject to minimum investment amounts (R5,000). It is important to note that if your contribution exceeds 120% of the greater of your annual contributions in the prior two years, your investment will enter an extended restriction period of another five years from the date of said contribution.
The Coronation Endowment Plan has an initial restriction period of five years. You can make one withdrawal from your investment during the initial restriction period or extended restriction period (as explained in the prior question). Your withdrawal value is limited to the lesser of 1) your total contributions plus 5% compound interest or 2) the market value of your investment at that time.
You can make unlimited withdrawals from your investment after the expiration of your initial restriction period, or any extended restriction period, if the latter applies.
No, you can remain invested in the Endowment for as long as you wish. You may also contribute after the five-year restriction period, provided that it complies with the 120% rule.
Yes, you may switch between underlying funds at any time as and when your investment objectives or circumstances change.
No, endowment plans are not transferable between financial service providers.
Yes, you may cede your investment as collateral or transfer ownership to a third party at any time.
No, you cannot borrow from your Endowment Plan. You may however use it as security if you need to access capital from another institution.
In the event of your death, the proceeds of your investment (minus the capital gains tax withheld) will flow directly to your nominated beneficiaries, resulting in a considerable saving in executor’s fees for your estate.