Last Updated on 22/04/2025 by Carl-Peter Lehmann
If you’re a retiree in South Africa, chances are that a large portion of your retirement savings is invested in balanced funds — often via Living Annuities or Retirement Annuities that provide income or tax advantages. But as we head further into 2025, it’s clear that the world is changing fast. Geopolitical shifts, economic policy pivots, and volatile markets are all reshaping the investment landscape — and staying on top of your portfolio has never been more important. In this article, we explore the best balanced funds for retirees in 2025, including the top-performing options, standout boutique managers, and how certain index-tracking funds are holding up. We’ll also unpack some broader considerations when constructing a resilient, income-generating portfolio in retirement. Let’s dive in.
What is a Balanced Fund?
Balanced funds are diversified unit trust portfolios that invest across multiple asset classes — typically equities, bonds, property, and cash. In the retirement space, most of these funds comply with Regulation 28 of the Pension Funds Act, which limits exposure to certain asset classes to manage risk. Under these rules, balanced funds can allocate up to 75% to equities and up to 45% offshore. These funds fall into the South African Multi-Asset – High Equity category as classified by ASISA, making it easier to compare them against their peers based on consistent criteria.
Are Balanced Funds Still the Right Fit in Retirement?
Whether a balanced fund is the best place for your retirement capital is open to debate. Once you’ve purchased a Living Annuity, you’re no longer required to stick to Regulation 28-compliant funds — giving you more flexibility to tailor your investment approach. Constructing a retirement portfolio focused on generating sustainable income is quite different from building a growth-oriented pre-retirement portfolio. That’s why understanding your personal income needs, risk tolerance, and lifestyle objectives should always drive your investment decisions.
That said, balanced funds remain a popular choice for retirees, particularly as part of Living Annuity strategies. For this review, we’ve analysed performance data from Morningstar across the South African Multi-Asset – High Equity category, focusing specifically on retail share classes to provide more relevant, fee-adjusted comparisons.
Further Reading: Some of the Best Global Equity Funds to Coonsider For your Living Annuity
What the Data Tells Us: Consistency, Cycles, and Boutique Outperformance
To identify standout performers, we’ve compared balanced fund returns over 3-, 5-, and 7-year periods — giving us a clearer view of consistency across different phases of the market cycle. While longer-term comparisons (10, 15, or 20 years) can be useful, they become less meaningful due to the smaller number of funds with such long track records. A smaller peer group makes it easier for any given fund to rank highly, which can skew the data.
Our analysis shows that many of the top-performing funds come from smaller, lesser-known (often boutique) managers like Granate, Abax, Fairtree, Aylett, and Long Beach. These managers often have greater flexibility and a wider opportunity set — especially in the domestic equity space. In contrast, some of the industry giants like Allan Gray Balanced, Ninety One Opportunity, and Coronation Balanced Plus — while still solid — have grown so large that their size can limit their ability to be nimble, particularly in the local market. That scale can become a headwind when competing against smaller, more agile funds with more freedom to invest off-benchmark or tilt meaningfully when conviction is high.
Best Balanced Funds For Retirees: Top performers Over 3Years
Over the past three years, several boutique balanced funds have delivered standout performance, comfortably outperforming the broader peer group. Out of a total of 199 funds in the ASISA South African Multi-Asset – High Equity category, the average annualised return was 9.22%. Against this backdrop, the top funds have delivered exceptional results.
Leading the pack is the Long Beach Managed Fund, with an impressive annualised return of 17.33% — nearly double the peer group average. Close behind is High Street Balanced, returning 15.87%, and ABAX Balanced, which posted 15.38% per year. These returns suggest strong underlying equity selection and nimble asset allocation, likely benefiting from higher offshore weightings and flexible positioning in local markets.
Granate Balanced and Visio Balanced complete the top five, delivering 14.6% and 13.7% respectively — still significantly ahead of the average. What stands out across these top performers is that they come from smaller, boutique-style managers with the flexibility to take active positions and manage capacity effectively, unlike many larger fund houses that can face structural constraints.
For retirees aiming to grow their capital in real terms while staying within the bounds of Regulation 28, these results are a compelling case for looking beyond the household names.
Top performing Balanced Funds Over 5 Years
Looking at performance over the past five years, a handful of funds have delivered exceptional results — far exceeding the peer group average. Among the 182 funds in the ASISA Multi-Asset – High Equity category, the average annual return was 15.17%. In contrast, the top five funds generated returns of over 20% per year, showcasing strong long-term positioning and alpha generation.
Topping the list is PSG Balanced, with a phenomenal 23.08% annualised return — a clear standout in the group. It’s followed closely by ABAX Balanced at 22.39%, which also featured in the 3-year ranking, reinforcing its consistency across different market cycles.
Granate Balanced secured the third spot with a return of 21.65%, followed by PSG Investor Managed Growth FoF at 20.91%, and Long Beach Managed at 20.63% — both of which also posted top-tier results over the shorter 3-year period.
Once again, this list reflects the strength of agile, actively managed funds that have remained well-positioned through volatile markets. These managers have likely benefited from a combination of meaningful offshore exposure, opportunistic local equity selection, and disciplined risk management — all key elements for retirees looking to preserve and grow capital in real terms.
Further Reading: Critical Investment Advice for Retirees
Best Balanced Funds for Retirees: Top 5 Performers over 7 years
When assessing long-term performance, the ability to generate consistent real returns becomes even more important — especially for retirees relying on their portfolio for income and growth. Among the 162 funds in the ASISA Multi-Asset – High Equity category with a 7-year track record, the average annual return is 8.45%. That makes the performance of the top five funds all the more impressive.
Leading the group is the Long Beach Managed Fund, which has delivered a 13.72% annualised return, outperforming the category average by more than 5 percentage points per year. ABAX Balanced (12.84%) and Fairtree Balanced (12.77%) follow closely — both showing remarkable long-term consistency and resilience through varying market conditions.
Aylett Balanced takes fourth place with an 11.28% return, while Nedgroup Investments Balanced (managed by Truffle) rounds out the top five at 10.98%. These funds have managed to beat inflation by a solid margin and exceed the typical CPI+4%–5% objective — a key benchmark for many retirees.
Notably, both ABAX Balanced and Long Beach Managed have appeared across all three timeframes (3, 5, and 7 years), further strengthening their case as dependable long-term performers.
Further Reading: How Much Do You Need to Retire in South Africa Today? Is R5 million or R10 million Enough?
How Do Passive or Index-Based Balanced Funds Compare?
While most of the attention often goes to actively managed balanced funds, there’s been a steady rise in the use of passive or enhanced index balanced funds — particularly among cost-conscious investors or those looking for simplicity and broad market exposure.
We’ve chosen to focus on a 5-year time frame here, as relatively few passive balanced funds have a meaningful track record beyond that. The 5-year window allows for a fair and complete performance comparison across the growing set of index-based options.
Here’s how the leading passive balanced funds stack up:
1. Satrix Balanced Fund leads the pack with a strong annual return of 17.89%, ranking 16th out of 182 funds in the peer group.
2. Nedgroup Investments Core Diversified Fund follows closely with 17.21%, ranked 31st.
3. 10X Your Future Fund delivers 17.20%, placing it in 32nd position.
4. Prescient Balanced Fund achieved 16.28%, which ranks 62nd.
5. Sygnia Skeleton Balanced 70 posted a 15.96% return, landing at 76th.
These results are impressive — particularly for low-fee, rules-based strategies — with several of these funds outperforming many traditional actively managed peers. The top three, in particular, have delivered returns that are firmly within the top quartile of the category.
It’s also worth noting the case of the Gryphon Prudential Fund, once regarded as a standout among passive-aligned options. However, its ultra-defensive positioning has hurt recent performance, resulting in a 179th place ranking out of 182 funds, with a 5-year annual return of just 8.19%. While this looks poor in hindsight, Gryphon’s conservative approach — holding high levels of cash and low equity exposure — was driven by a deep value and macro-based view. With growing global uncertainty and the potential return of disruptive policies under a second Trump presidency, it remains to be seen whether their call ultimately proves wise over the next cycle.
Now Read: Who are Amongst The Worst Performing of the Big Balanced Funds
Why Managing Volatility Matters Just as Much as Return
For retirees drawing a regular income, managing portfolio volatility is just as important as chasing strong returns — especially in the early years of retirement. This is where the concept of sequence of return risk becomes critical. When markets are turbulent and you’re withdrawing income at the same time, it can amplify losses and erode your capital base far more quickly than you might expect.
To illustrate this, consider the example we’ve included:
All three scenarios deliver the same real return of 6.5% per annum over 10 years. But the order in which those returns occur makes a dramatic difference:
- In Scenario 1, the strong years come first, providing a solid portfolio base before markets decline later on.
- In Scenario 3, the poor years come first — the same negative returns occur early, just in reverse order — and all the positive returns are back-loaded.
Despite having the same average return, the outcome in Scenario 3 is starkly different: you end up with less than half the capital at the end of 10 years. That’s the effect of sequence risk.
This is why, at Henceforward, our approach to constructing retirement portfolios is not just about finding funds with the highest returns. It’s about managing downside risk and smoothing volatility — often through the inclusion of hedge funds, smoothing funds, or alternative asset classes that can act as stabilisers during difficult markets.
When you’re retired and drawing an income, how you earn your return matters as much as the return itself.
Read Next: What Makes Henceforward The Best Financial Advisor for Retirees
Final Thoughts: Rethink What 'Best' Really Means
The title of “best” is always subjective — it depends on your needs, goals, and personal view of risk. But when reviewing or building your investment portfolio in 2025, we hope the insights and data shared here offer some useful perspective.
Of course, choosing the right fund isn’t only about past performance. It also depends on your required income level, your time horizon, and your tolerance for volatility. That’s why proper risk management and a thorough retirement lifestyle planning process should always be part of the decision-making.
What we’re really aiming to highlight, though, is that there’s more to retirement investing than just the household names. Boutique fund managers like ABAX, Granate, Fairtree, Aylett, Truffle, and others are consistently proving that size isn’t everything — and in many cases, it’s a disadvantage.
At Henceforward, we pride ourselves on uncovering these specialists and investment gems. Thanks to our relationship with discretionary manager Graviton, we’re able to access independent, in-depth research across a wide universe of options. This means we can construct portfolios that go beyond the usual suspects — portfolios that are designed to deliver better outcomes for our clients.
In the end, it’s not about chasing what’s popular — it’s about finding what truly works for you.
Read Next: The 10 Biggest Retirement Planning Mistakes To Avoid
Carl-Peter Lehmann
Carl-Peter is a Director and Partner at Henceforward, with over 20 years of experience in financial planning and investments. He is a CERTIFIED FINANCIAL PLANNER® and seasoned investment professional, passionate about helping retirees achieve the goals and lifestyle outcomes that matter most to them.
📘 Download Our Free Retirement Insights Guide for 2025
Planning to retire this year — or thinking seriously about it soon?
Our Retirement Insights: 2025 guide is designed specifically for South African retirees and pre-retirees. It’s packed with insightful, practical, and actionable information to help you make smart, confident decisions about your future.
Inside, you’ll find:
- The latest thinking on retirement income strategies
- How to manage market risk and sequence of return risk
- Updates on annuities, investment options, and tax considerations
Whether you’re already drawing an income or just getting ready to retire, this guide will give you clarity and direction in a fast-changing world.
