“What’s the best balanced fund for retirees?” is one of the most common questions we hear, and one of the most searched. It’s also framed in a way that almost guarantees a misleading answer. Type it into Google and you’ll get a list ranked by past returns — usually over three or five years, usually with the biggest number at the top.
For someone still working and contributing, chasing the highest return is defensible. For someone retired and drawing an income, it’s the wrong lens. The retiree’s problem isn’t maximising growth; it’s generating a sustainable income without running the capital down, while surviving the bad years that inevitably arrive. That makes risk at least as important as return, and it changes which funds actually look attractive.
So this piece does two things. First, it looks at the data differently: not just returns, but returns relative to the volatility taken to earn them, across both the High Equity and Medium Equity categories. Second — and more importantly — it makes the case that choosing a retirement portfolio is a more involved exercise than picking a balanced fund off a list. Treat what follows as a thought exercise in what to look at, not a shopping list.
- Key Definitions
- What a “Balanced Fund” Actually Is
- The Number Most Retirees Focus On Is the Wrong One
- Best Returns at the Lowest Risk: What the Numbers Show
- Why Volatility Isn’t the Whole Risk Story
- A Balanced Fund Is Not a Retirement Portfolio
- Frequently Asked Questions
- Conclusion: Ask a Better Question
Key Definitions
Balanced fund (multi-asset fund)
A single unit trust that holds a mix of asset classes — local and offshore equities, bonds, property, and cash — inside one portfolio. It rebalances automatically to stay within a set risk profile, which is why it’s a popular “one-fund” solution for retirement income.
ASISA MA High Equity
The category most people mean by “balanced fund”. These funds can hold up to roughly 70–75% in equities and target a long-term return of around CPI + 5%. Higher growth potential, but also higher short-term volatility.
ASISA MA Medium Equity
A more conservative multi-asset category, typically holding around 60% equities and targeting roughly CPI + 4%. Lower expected return than High Equity, but meaningfully lower volatility — which can matter more for an income-drawing retiree than the last percent of return.
Standard deviation (volatility)
A measure of how much a fund’s returns bounce around its average. A fund with a 6% standard deviation is steadier than one with a 10% standard deviation. It’s the most common proxy for risk, though, as we’ll see, an incomplete one.
Risk-adjusted return
Return measured relative to the risk taken to achieve it, rather than in isolation. Two funds returning 12% are not equal if one did it at 6% volatility and the other at 10%. For retirees, the steadier route to a similar destination is usually the better one.
Sequence-of-returns risk
The risk that poor returns early in retirement do lasting damage. Drawing an income from a falling portfolio means selling assets at depressed prices, permanently shrinking the capital base. It’s the reason the path of returns matters more than the average in the first decade of retirement.
What a “Balanced Fund” Actually Is
In South Africa, “balanced fund” is loose shorthand. Most people use it to mean a single multi-asset fund that holds a bit of everything — local and offshore shares, bonds, property, cash — and rebalances itself so you don’t have to. It’s the default building block for retirement income because it’s simple: one fund, one decision, an income drawn off the top.
Underneath that shorthand sit two ASISA categories that matter for retirees, and most “best balanced fund” articles only look at one of them.
| Category | Typical equity exposure | Long-term return target | What it’s built for |
|---|---|---|---|
| MA High Equity | Up to ~70–75% | ~CPI + 5% | Growth with a long horizon |
| MA Medium Equity | ~60% | ~CPI + 4% | Steadier growth, lower drawdowns |
The High Equity category is what most people picture, and it’s where the well-known names live — Allan Gray Balanced, Coronation Balanced Plus, Ninety One Opportunity, M&G Balanced. Medium Equity gets less attention. It holds a little less in shares, which caps its upside in strong markets but cushions the falls. For a retiree drawing an income, that trade — a touch less growth for noticeably less turbulence — deserves more consideration than it usually gets. Which is why we’ve looked at both.
The Number Most Retirees Focus On Is the Wrong One
Start with the obvious question: over the five years to 31 May 2026, did the higher-equity category actually reward investors for the extra risk? Here are the category medians — the middle fund in each group, which is a fairer benchmark than the single best performer.
| Category (median fund) | 5-year return p.a. | 5-year volatility | 3-year return p.a. |
|---|---|---|---|
| MA High Equity | 11.4% | 7.8% | 13.6% |
| MA Medium Equity | 10.8% | 6.8% | 13.0% |
Look at what that says. Over this particular five-year window, the typical High Equity fund earned roughly 0.6% more per year than the typical Medium Equity fund — and took a full percentage point more volatility to do it. For someone building wealth over decades, that’s a reasonable bargain; the extra growth compounds. For someone in retirement, drawing an income and far more exposed to a bad year, paying a meaningful increase in volatility for a slim return pickup is a poor exchange.
This is the core point. A return number on its own tells you only half the story. The other half is how much your stomach — and your capital — had to endure to earn it. Rank funds purely by return and you systematically favour the ones taking the most risk, which is precisely the wrong bias for a retiree.
Best Returns at the Lowest Risk: What the Numbers Show
The more useful question is: which funds delivered strong returns and kept volatility low? In other words, the best return for the least risk. To answer it fairly, we screened every fund in both categories with a five-year track record and isolated those that beat their own category on both counts — above-median return and below-median volatility. These are the funds doing the most with the least.
Medium Equity: quiet achievers
Several Medium Equity funds produced High-Equity-like returns at distinctly lower volatility over the period — exactly the profile a drawdown investor wants.
| Fund (Medium Equity) | 5-year return p.a. | 5-year volatility | 3-year return p.a. |
|---|---|---|---|
| Nedgroup Investments Opportunity | 14.1% | 6.2% | 14.9% |
| Anchor BCI Diversified Moderate | 12.3% | 6.5% | 14.1% |
| Sygnia Skeleton Balanced 60 | 11.9% | 6.8% | 14.9% |
| Amplify SCI Absolute | 11.5% | 6.1% | 14.5% |
| GraySwan SCI Moderate | 11.4% | 5.7% | 11.2% |
Nedgroup Opportunity stands out: a 14.1% annualised return at just 6.2% volatility is, on a risk-adjusted basis, the most efficient result across both categories over this window. A Medium Equity fund outpacing most of the High Equity field while taking less risk is the entire argument for not ignoring the category. (Sygnia Skeleton Balanced 60 is worth a second look too — a near-passive fund delivering a competitive result at a fraction of the cost of the active options.)
High Equity: the standouts and the surprises
Within High Equity, a handful of funds achieved Medium-Equity-like volatility while keeping the higher return — the best of both worlds, at least over this period.
| Fund (High Equity) | 5-year return p.a. | 5-year volatility | 3-year return p.a. |
|---|---|---|---|
| PPS Managed | 14.6% | 6.8% | 16.7% |
| Allan Gray Balanced | 13.9% | 6.5% | 15.4% |
| Anchor BCI Diversified Growth | 13.2% | 7.7% | 15.1% |
| GraySwan SCI Aggressive | 12.8% | 6.9% | 13.0% |
| PPS Balanced FoF | 12.5% | 6.5% | 13.6% |
What’s just as instructive is where the household names landed. Allan Gray Balanced screened near the top — strong return, genuinely low volatility for the category. Others were more sobering. Over this particular five years, Coronation Balanced Plus returned around 10.9% at 9.6% volatility, putting it below the category median on return and above it on risk. M&G Balanced (12.3% at 8.3%) and Old Mutual Balanced (11.5% at 8.1%) sat mid-pack; Foord Balanced (10.3% at 6.9%) and Ninety One Opportunity (10.0% at 7.3%) trailed on return. None of that makes them bad funds — five years is one window, and several have long, distinguished records through earlier cycles. It simply shows that brand recognition and risk-adjusted performance are not the same thing, and that the “obvious” choice isn’t automatically the efficient one.
A necessary caveat before anyone reaches for a switch form: none of this is a recommendation. It’s a snapshot of one five-year period, shaped by a specific market regime — the post-COVID recovery and the re-rating of SA assets after the 2024 election. A different window would reshuffle the names. The exercise is about how to read the data, not which fund to buy.
Why Volatility Isn’t the Whole Risk Story
Standard deviation is a useful proxy for risk, but it has a blind spot that matters enormously for retirees: it treats a 10% gain and a 10% loss as equally “risky”. To a fund’s volatility score, upside wobble and downside wobble look the same. To a retiree drawing an income, they could not be more different.
The risk that actually damages a retirement is not symmetric bounce — it’s a deep drawdown at the wrong time. This is sequence-of-returns risk, and it’s the single most important concept in retirement investing. If a portfolio falls hard in the first few years of retirement while you’re simultaneously drawing an income, you’re selling units at depressed prices to fund that income. Those units never recover, and the capital base that has to last another two or three decades is permanently smaller. A retiree and an accumulator can hold the identical fund through the identical crash and walk away with completely different outcomes — because one was adding and the other was withdrawing.
Standard deviation hints at this but doesn’t capture it. A fund can show modest volatility and still deliver a nasty, concentrated loss in a single bad year. That’s why the volatility screen above is a starting filter, not a verdict. The deeper questions — how did this fund behave in the actual drawdowns of 2020 and 2022? how quickly did it recover? — need the kind of analysis a ranking table can’t show. It’s also why a sensible retirement structure keeps a cash buffer of a year or two of income, so you’re never forced to sell growth assets into a falling market to pay the bills.
A Balanced Fund Is Not a Retirement Portfolio
Here’s the part that the “best fund” framing quietly skips. Picking a good balanced fund and drawing an income off it is still one of the most common ways South Africans run their retirement. It’s understandable — it’s simple, it’s cheap, and a good balanced fund does a lot of sensible things automatically. But simple and complete are not the same thing, and a single fund is a blunt instrument for a problem with this many moving parts.
A balanced fund rebalances to a fixed risk profile. It knows nothing about your drawdown rate, your time horizon, your tax position, your other assets, or whether you’ve just retired into a bear market. Two retirees in the identical fund can have very different experiences depending on how much they draw, whether they hold a cash buffer, and how the rest of their capital is arranged. The fund is one input. The outcome depends on the system around it.
It also reframes the High-versus-Medium-Equity choice we started with. Moving down the equity scale is only one way to reduce volatility — and it costs you expected return in the process. The more elegant route, where it’s available, is to diversify the sources of return so they don’t all rise and fall together. A portfolio that pairs equities with assets that behave differently can run at lower overall volatility without simply dialling growth down. That’s a portfolio construction decision, not something any single balanced fund makes for you.
A more deliberate retirement structure usually layers several things that no single balanced fund can do on its own:
- An income and cash buffer — typically one to two years of income in cash or income funds, so market falls don’t force you to sell growth assets at the worst time. This is the practical defence against sequence risk.
- A growth engine — where a balanced fund (or a blend of them across managers and styles) earns its keep, compounding over the long horizon a 30-year retirement still has.
- Diversifying return drivers — return sources that don’t move in lockstep with the equity market. Certain hedge funds (now accessible to retail investors and inside living annuities) and absolute-return strategies aim to generate returns largely independent of whether the JSE rises or falls. Blended in sensibly, low-correlation assets can lower a portfolio’s overall volatility without a matching sacrifice in return — which is precisely the trade a retiree wants. The caveat: manager dispersion is wide, fees are higher, and “uncorrelated” can weaken in a genuine crisis, so these need skill to use, not a default allocation.
- A guaranteed floor, for some — a portion in a life annuity to cover essential, non-negotiable expenses, removing market and longevity risk from the part of your income you can’t afford to lose. Many retirees are best served by a blend of guaranteed and flexible income, not one or the other.
- Offshore exposure — diversifying away from a concentrated, ~1%-of-global-GDP local economy. A balanced fund includes some offshore, but your overall offshore weighting is a portfolio-level decision, covered in our offshore investing guide.
- Tax-aware asset location — the same fund behaves differently inside a living annuity versus a discretionary investment versus a tax-free account. Where you hold an asset can matter as much as which asset you hold.
Notice that a living annuity, the vehicle most retirees use, isn’t even bound by Regulation 28 — so you’re not limited to the 75% equity ceiling that constrains your pre-retirement funds. That’s freedom, but it’s freedom that has to be used deliberately rather than by defaulting to whatever balanced fund topped a list.
So treat the tables above for what they are: a way to interrogate funds more intelligently than by return alone. The genuinely important questions — how much can I safely draw, how much guaranteed income do I need, how much offshore, where should each asset sit for tax — sit a level above fund selection. Get those right and a decent balanced fund slots neatly into the plan. Get them wrong and the “best” fund in the country won’t save the outcome.
Frequently Asked Questions
What is the best balanced fund for retirees in South Africa?
It depends on your time horizon, drawdown rate, and how much volatility you can absorb. Over the five years to 31 May 2026, the average Medium Equity fund delivered almost the same return as the average High Equity fund at lower volatility — a profile that suits income-drawing retirees. A longer horizon or a lower drawdown can justify more equity. There's no universal answer.
Is standard deviation a good measure of risk for retirees?
It's a useful starting filter but an incomplete one. Standard deviation treats gains and losses as equally risky, whereas the real threat to a retirement is a deep loss early on — sequence-of-returns risk. Two funds with similar volatility can behave very differently in an actual market crash, which is what matters most when you're drawing an income.
How many balanced funds should a retiree hold?
The number of funds is less important than the overall structure. Spreading across two or three managers with different styles can reduce reliance on any single manager, but the bigger levers are your drawdown rate, a cash buffer to manage sequence risk, your offshore weighting, and how assets are located for tax. A balanced fund is one component of a retirement plan, not the plan itself.
Are passive or index balanced funds suitable for retirees?
They can be. Low-cost options such as the Sygnia Skeleton range and Satrix Balanced index funds delivered competitive risk-adjusted returns over the period, and cost is one of the few things you can control. That said, fit matters more than format — the right risk profile and a sensible income structure matter more than whether the underlying fund is active or passive.
Should a retiree choose a high equity or medium equity balanced fund?
It depends on your time horizon, drawdown rate, and how much volatility you can absorb. Over the five years to 31 May 2026, the average Medium Equity fund delivered almost the same return as the average High Equity fund at lower volatility — a profile that suits income-drawing retirees. A longer horizon or a lower drawdown can justify more equity. There's no universal answer.
Conclusion: Ask a Better Question
If you came looking for the single best balanced fund for retirees, the honest answer is that the question is incomplete. The data does offer something useful: judged on return relative to the risk taken — the measure that actually matters when you’re drawing an income — Medium Equity funds deserve a far closer look than they usually get, and some of them held their own against the best of the High Equity field while taking less risk. Brand-name recognition, meanwhile, turned out to be a poor guide to risk-adjusted performance.
But the more important takeaway is structural. A balanced fund is a building block, not a retirement portfolio. The decisions that most determine whether your money lasts — how much you draw, whether you hold a cash buffer, how much guaranteed income you need, how much sits offshore, how much you diversify your return drivers, and where each asset is held for tax — all sit a level above fund selection. Optimise the fund and ignore the structure, and you’ve polished one brick while the wall leans.
That’s the work we do for retirees: stress-testing the whole structure, not just the fund list, so the income holds up in difficult markets and not only in good ones. If you’d like an independent second opinion on how your retirement capital is put together — drawdown, structure, tax, and fund selection included — we’re happy to work through it with you. You may also find our retirement income guide a useful next read.
Choosing the right fund is the easy part. The harder, more valuable work is structuring the whole portfolio so your income survives the bad years, not just the good ones. If you’re a retiree (or close to it) with investable assets of R15 million or more and you’d like an independent view on how your capital is put together, we’re happy to take a look.
This article is for informational purposes only and does not constitute financial advice.
Henceforward (Pty) Limited is an authorised representative of Graviton Wealth Management
(FSP 8772). References to market events and historical performance are for illustrative
purposes only and are not indicative of future results. Fund performance data is sourced from
Morningstar and is current as at 31 May 2026. No fund named is recommended; funds are
referenced for educational purposes only. Projections and illustrations are for discussion
purposes only. Consult a qualified financial advisor before making any investment decisions.