A man sat across from us last year with eleven unit trusts and no idea why he owned any of them. Each one had arrived for a reason at the time — a recommendation, a good year, a conversation at a braai, a magazine list of top performers. Individually, most of them were perfectly respectable funds. Together they were a mess: four managers all quietly buying the same handful of JSE shares, an offshore allocation that had drifted to nearly double what he intended, and a money market holding from 2019 that he had simply forgotten about. Nobody had rebalanced it in six years. Nobody was ever going to. There was no one whose actual job it was.
That is the problem a wrap fund solves. Not glamour, not access to something exotic. Just the deeply unfashionable business of someone being accountable for the whole picture, in writing, every quarter, for as long as you own it.
What a wrap fund actually is
Strip away the jargon and a wrap fund is a recipe. It is a fixed, disclosed blend of underlying unit trusts, held together in one line on your investment statement, managed to a stated risk profile and objective. You do not buy eleven funds. You buy one thing, and inside that one thing sits a deliberately assembled set of managers who each do a different job.
The words get used loosely in this industry, so it is worth being precise. A model portfolio is the recipe itself — the list of managers and their weightings. A wrap fund is that model portfolio implemented on a platform, wrapped up so that it behaves like a single investment for administrative purposes. In practice, at least in South Africa, people use the two terms almost interchangeably, and we will not be precious about it here.
What matters more is what a wrap fund is not. It is not a new collective investment scheme sitting on top of your funds, adding its own layer of regulation and cost. The underlying unit trusts are still held in your name, on your platform, and you can see every one of them. Nothing is hidden inside a black box. If we hold a manager, you can look them up, read their fact sheet and form your own view. That transparency is not a nice-to-have. It is the whole reason the structure is worth defending.
You do not buy eleven funds. You buy one thing — and inside it sits a deliberately assembled set of managers who each do a different job.
Why the structure exists at all
Because the alternative, which is what most people are living with, fails in three predictable ways.
The first is drift. Every portfolio that is left alone slowly becomes a different portfolio. The things that did well grow into an outsized share of your money, which means your risk quietly rises exactly when valuations are least forgiving. Nobody chooses this. It simply happens, in the absence of a hand on the tiller.
The second is accidental duplication. Owning six good funds is not the same as owning a good portfolio. If four of them are overweight the same three rand hedges, you have concentration you never signed up for, dressed as diversification. You cannot see this from a list of fund names. You can only see it by looking through to the underlying holdings, which requires both the data and the inclination.
The third is nobody's job. When a manager loses their lead portfolio manager, or a strategy stops behaving the way it was sold, someone needs to notice and decide. In a self-assembled portfolio, that someone is you, and you have a business to run and children to fetch. The decision does not get made. It gets postponed, and postponement is itself a decision, taken badly.
Who actually makes the decisions
Our model portfolios are run by an investment committee, and it is worth saying plainly who sits on it, because vagueness here is where the industry usually hides.
The committee is a partnership between BKA Wealth and the investment team at Graviton Financial Partners, part of the Sanlam Investments group. From our side, Petri Beyers and Paul Kotzé bring the view from the client’s chair — what these portfolios have to do in real lives, with real income needs, real tax positions and real anxieties. From the investment side, Lehan Kruger, a CFA charterholder who manages the Graviton retirement income range, brings the portfolio construction discipline. Behind that sits the Graviton and Sanlam Investments research capability: analysts whose full-time occupation is manager due diligence, asset allocation research and monitoring strategies we would otherwise have to take on trust.
The committee engages continuously and meets formally each quarter. At those meetings the holdings are reviewed one by one, the portfolios are checked against their mandates and their benchmarks, and active decisions get taken — to add, to trim, to replace or, quite often, to do nothing at all. Doing nothing, when it is a decision rather than an omission, is a perfectly good outcome. The point is that it was considered.
This is the part we would ask you to weigh most carefully, because it is the part that is easiest to claim and hardest to verify. Plenty of advisers have a model portfolio. Rather fewer have a documented committee, external research capability and a minuted quarterly process behind it. Ask whoever manages your money which of the two they have. The answer tells you a great deal.
The BKA Wealth range
We run a range rather than a single portfolio, because risk is not a personality trait — it is a function of what the money is for and when you need it.
At the more measured end sit portfolios built for shorter horizons and smaller drawdowns, weighted towards income assets with a deliberately capped exposure to equities. In the middle sit the balanced mandates, meant for a three to five year view, diversified across all the major asset classes. At the growth end sit the equity-biased portfolios for money that will not be touched for at least five years, and an offshore mandate that can invest anywhere in the world without the constraints that apply to retirement money.
That last distinction matters more than most people realise. Where the money is retirement money — a retirement annuity, a pension or provident fund, a preservation fund — the portfolio must comply with Regulation 28 of the Pension Funds Act, which caps how much can sit in equities and offshore. Where the money is discretionary, no such cap applies, and the portfolio can be built for the horizon rather than for the regulation. Running both, side by side, under one committee, is how the two halves of a household’s wealth end up pulling in the same direction instead of quietly cancelling each other out.
Retirement income is a different problem
Everything above is about building capital. Drawing an income from it is a different discipline entirely, and it deserves its own solutions rather than a slightly more cautious version of the growth ones.
Two risks dominate once you stop earning. The first is longevity risk: living longer than the money does. The second, and the crueller of the two, is sequence risk. This is the risk of retiring into a bad market. Two retirees can experience identical average returns over twenty years and end up in entirely different circumstances, purely because one of them met the poor years first, while drawing an income. Selling units to fund a monthly drawdown in a falling market does permanent damage that a later recovery cannot fully undo. Averages do not comfort you here. The order matters.
The Graviton retirement income solutions are built around that specific problem. There are five, and each is named for the drawdown rate it is designed to sustain — from 2.5% at the conservative end through to 6% for those who need more income and can accept a longer horizon and more volatility to get it. You are not asked to guess at a risk profile in the abstract. You start with the income you need and match the solution to it.
What sits inside them is genuinely different from a conventional balanced fund. Alongside ordinary unit trusts, these portfolios use hedge funds to improve the risk-return trade-off, smooth bonus policies to dampen the month-to-month swings that make retirees anxious, and alternative assets to help the portfolio recover from drawdowns. The stated aim is what Graviton calls an asymmetric outcome: a narrower band of possible results, skewed towards the positive, with less downside than the category average. Less exciting on the way up. Considerably more comfortable on the way down. For someone drawing an income, that trade is almost always the right one.
Two retirees can earn identical average returns and end up in entirely different circumstances, purely because one of them met the bad years first.
The wider Graviton range
Beyond the retirement income solutions, Graviton runs a broad set of building blocks that we draw on where they fit: conventional multi-asset funds from flexible income through to balanced; absolute return funds targeting inflation plus a stated margin; hedge fund portfolios across three risk profiles; global funds, both actively managed and index-tracking; hybrid ranges; and Shariah-compliant options for clients who need them.
The practical significance of that breadth is availability. These solutions are approved across most of the major South African platforms — Glacier, Allan Gray, Ninety One, Momentum, Old Mutual and Sanlam — as well as the main offshore platforms. In plain terms: you are rarely forced to move your money to an administrator you do not want, simply to access the portfolio that suits you. Availability does vary by fund and by platform, and it changes from time to time, so it is worth confirming rather than assuming.
What it costs, and what it will not do
A wrap fund adds a management fee on top of the underlying managers’ own costs. We would rather say that plainly than have you discover it in a footnote. The fee is small, it is disclosed, and it should be measured against what it buys: continuous oversight, quarterly decisions, institutional research access and a portfolio that stays the shape it was designed to be. If the answer to “what does this fee buy me?” is not immediately obvious, the fee is too high, whoever is charging it.
Two honest limitations. A wrap fund will not make a bad savings rate into a good retirement — structure cannot rescue arithmetic. And active management, however well governed, does not guarantee outperformance in any given year. What it does is make the portfolio deliberate rather than accidental, and it gives you a named group of people who have to account for it. That is a real thing, and it is not the same as a promise.
What this asks of you
- That you look through, not just at. A list of fund names tells you almost nothing. Ask what the underlying exposure actually is, where it is duplicated, and what the whole thing costs once every layer is counted. If you cannot get that on one page, that is your answer.
- That you judge the process, not the last twelve months. Any portfolio can have a good year. What you are really buying is who decides, how often, on what evidence, and whether they will tell you when they are wrong. Recent returns are the least reliable thing on the fact sheet.
- That you let the structure be boring. The value of a properly run model portfolio shows up slowly and almost invisibly — in the rebalance you did not have to think about, the manager who was replaced before it mattered, the offshore weighting that never drifted. It is the least dramatic thing we do, and over twenty years it is quite possibly the most valuable.
The man with the eleven unit trusts now owns two portfolios: one for the retirement money, built inside Regulation 28, and one for the discretionary money, built for a longer horizon. Between them, roughly the same underlying exposure he was aiming at all along — only now it is intentional, monitored, and someone else’s job to keep it that way. He said the strangest part was how much less he thinks about it.
That is rather the point.
