A Regulation 28 portfolio, built within the limits rather than checked against them afterwards
Regulation 28 of the Pension Funds Act says how much of a South African retirement fund may sit in each kind of asset. Most tools let you build a portfolio and then tell you it breaks a limit. This one takes the limits as rules first, so every mix the optimiser proposes already fits, and it prices the mix on J.P. Morgan’s rand edition assumptions with the source of every number on the page.
The limits, and who sets each one
Six limits bind a portfolio built from index sleeves. The offshore limit is the one people get wrong most often, because it is not Regulation 28’s at all.
| Asset class | Limit | Source |
|---|---|---|
| Offshore, all foreign assets together | 45% | Exchange control: SARB Circular 10/2022, one limit, the African allowance absorbed |
| Equities | 75% | Regulation 28, Table 1 |
| Immovable property | 25% | Regulation 28, Table 1 |
| Private equity | 15% | Regulation 28, Table 1, raised from 10% in 2022 |
| Hedge funds | 10% | Regulation 28, Table 1 |
| Crypto assets | 0% | Regulation 28, 2022 amendment: excluded outright |
The asset-class limits are Table 1 of Regulation 28 as amended in Government Gazette 46649 (Notice 2230, published 1 July 2022, effective 3 January 2023). The offshore limit is exchange control: SARB Exchange Control Circular 10/2022 combined the old 30 and 40 percent limits and the 10 percent African allowance into one 45 percent of retail assets under management, and Circular 2/2025 records that the IMF recommended it not be reduced. With offshore capped at 45 percent, at least 55 percent of the fund is South African, and that domestic requirement is the part that shapes the answer.
Two traps that make the sources disagree
First, the 10 percent Africa allowance no longer exists as a limit, but Circular 10/2022 kept African exposure as a reporting category on the quarterly return, so anyone reading the reporting form infers a sub-limit that was abolished. Second, Regulation 28 has a 45 percent of its own, for infrastructure, and quoting it as the offshore cap is wrong even though the number matches. Neither figure is the FSCA’s: it supervises both and sets neither.
What the numbers are
The builder prices South African lines on J.P. Morgan’s 2026 Long-Term Capital Market Assumptions, rand edition, read line by line rather than converted from the dollar book. These are ten-to-fifteen-year compound returns, nominal, in rand.
| Line | Return | Volatility |
|---|---|---|
| South African Equity · FTSE/JSE, in rand | 4.5% | 15.6% |
| South African Government Bonds · nominal, all maturities | 10.1% | 7.5% |
| South African Cash · money market | 7.0% | 0.7% |
| AC World Equity · unhedged, in rand | 8.5% | 14.4% |
| U.S. Large Cap · unhedged, in rand | 8.2% | 15.7% |
| South African inflation · the same edition’s assumption | 4.9% | 1.6% |
Two things to know before trusting them. The South African equity figure fell from 8.4 percent in the 2025 edition to 4.5 percent in the 2026 edition, below the same edition’s cash figure, which is a strong house view rather than a market fact. And J.P. Morgan is the only one of the four houses this tool averages that publishes a rand edition, so every South African line is a single opinion, flagged as such on the assumptions page, and you can type your own number over it.
How the builder applies it
Choose South Africa as where you invest from and the guided flow asks whether this is a Regulation 28 fund. Answering yes plants the six limits as rules on the worksheet, the same rules a professional user sees as chips and can edit, and the optimiser holds them exactly rather than warning afterwards. The result comes back in four numbers: expected return, volatility, Sharpe ratio, and what the mix would have lost through the 2022 rate shock in rand, month end to month end, which for a rand holder of world equities was less than a dollar holder lost because the rand fell.
Open the builder · free, runs in your browser, and nothing about the portfolio is sent anywhere. Not advice, and not a compliance certificate: the fund’s trustees and administrators remain responsible for its reporting.
Frequently asked questions
Is the offshore limit 30 percent, 40 percent or 45 percent?
It is one limit of 45 percent of retail assets under management. SARB Exchange Control Circular 10/2022, dated 23 February 2022, combined the old 30 and 40 percent limits and the 10 percent African allowance into a single 45 percent, and Circular 2/2025 records it unchanged. The 10 percent African figure survives only as a reporting line on the quarterly asset allocation return, which is why some commentaries still quote it as a sub-limit.
Does Regulation 28 itself set the offshore limit?
No. The offshore limit is exchange control, set by National Treasury and administered by the Reserve Bank. Regulation 28 is made by the Minister of Finance under the Pension Funds Act and sets the asset-class limits. Regulation 28 does have its own 45 percent, but that one is the infrastructure limit. The FSCA supervises both and sets neither.
Which return assumptions does the builder use for South African assets?
J.P. Morgan's 2026 Long-Term Capital Market Assumptions, rand edition, read line by line: South African equity, government bonds, inflation-linked bonds, listed property, cash and inflation, with every foreign line restated into rand using J.P. Morgan's own currency treatment. Only one of the four houses the tool averages publishes a rand edition, so South African lines are flagged as single-source on the assumptions page rather than presented as a consensus.
Does it check compliance for me?
It applies the six limits that bind a portfolio of index sleeves and holds them exactly in the optimiser. It does not model per-issuer limits, the commodities limit, the infrastructure limit or the look-through rules for pooled vehicles, and it is not a compliance certificate. Trustees and administrators remain responsible for the fund's reporting.