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19 Jan 2015

Consistency Is Key To Investment Success

Morningstar recently released their 2014 investment return survey for the South African unit trust industry. Some investors have come to expect Foord’s funds to top the rankings every calendar year and may be disappointed that we did not achieve a Top-3 place in 2014.

Foord’s investment reputation is not built on shooting the corners or aiming for the best returns over 12 months. Rather, we strive for consistency in achieving long-term investment success. Investment success means producing returns over full investment cycles that appreciably exceed inflation*, while actively managing the risk of permanent capital loss. We believe that if we are successful in this endeavour, our long-term returns will be stellar when compared to our peers.

Therefore, it is not important to us that none of our funds ranked 1st in their particular sectors in 2014. Much more importantly, 2014 was another year of inflation-beating, absolute returns across the fund range (see table below). When compounded with previous calendar year returns, it is evident that Foord continues to achieve investment success.

While it is not our specific goal, it is nevertheless also pleasing to see that Foord has achieved top-ranking returns relative to the peer group over the longer term. Every Foord fund is ranked in the top 5 funds across all major long-term periods from 5, 7 and up to 10 years, while two funds achieved best-in-sector returns over the last 5 years. This evidences the consistency for which we strive.

As stewards of our investors’ capital, we recognise the responsibility of care and the duty of service we owe to both new and long-standing investors alike. We can be proud of the returns achieved for all periods ending December 2014. Our congratulations go out to Dave as global CIO and to the South African and Singapore investment teams who have all contributed to these achievements.

 

1 year

5 years 

7 years 

10 years

SA Inflation

5.8%

5.3%

6.0%

6.1%

Foord Balanced Fund

10.1%

15.7%

12.3%

16.8%

Average (South Africa – Multi- Asset – High Equity)

9.4%

12.5%

9.5%

13.3%

Rank

48/110

3/63

3/52

2/29

 

 

     

Foord Equity Fund

14.5%

20.9%

15.1%

20.1%

FTSE/JSE All Share Index

10.9%

15.8%

11.3%

18.0%

Average (SA Equity General)

10.3%

14.1%

9.7%

15.6%

Rank

25/124

1/85

3/75

2/46

 

 

     

Foord Flexible Fund

10.0%

20.3%

   

Average (Worldwide – Multi Asset – Flexible)

11.5%

14.6%

   

Rank

13/28

1/16

   
 

 

     

Foord International Feeder Fund

9.5%

15.9%

11.6%

 

Average (Global – MA – Flexible)

9.5%

14.2%

  9.3%

 

Rank

11/18

5/15

2/15

 

* In 2014, Foord celebrated a 30-year track record in managing money for pension fund investors, including an uninterrupted 25-year term in managing the AJ North Pension fund. Over this 30- year period, retirement fund members invested with Foord earned compound annualised returns of 21.4% per annum, equal to 14.1% per year ahead of consumer inflation. By the end of the 30-year period, R100 000 invested at inception had exceeded the cost of living by 22 times. But it was the consistency within this long time period which should be celebrated most: not once did the 10-year rolling returns fail to produce returns in excess of inflation + 5%. This is a remarkable accomplishment during a time of major economic and political turmoil and associated market volatility.

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