Foord Balanced Fund
For long-term investors in South African retirement fund products
INVESTMENT OBJECTIVE
Managed to comply with the statutory investment limits set for retirement funds in South Africa, the fund aims to grow retirement savings by meaningful, inflation-beating returns over the long term.
FOR SOUTH AFRICAN INVESTORS
• With a moderate risk profile
• Seeking long-term, inflation-beating returns
• Over periods exceeding five years
• From a South African retirement fund investment product (Reg 28).
| Year | Fund Return % | Benchmark Return % | SA Inflation % |
|---|---|---|---|
| 2002 (from 01/Sep) | 6.1 | 0.7 | 3.1 |
| 2003 | 15.3 | 16.1 | 0.3 |
| 2004 | 23.8 | 25.5 | 3.4 |
| 2005 | 45.8 | 30.6 | 3.6 |
| 2006 | 35.9 | 26.2 | 5.9 |
| 2007 | 12.1 | 12.5 | 8.9 |
| 2008 | -5.9 | -5.6 | 9.5 |
| 2009 | 18.0 | 17.7 | 6.3 |
| 2010 | 17.2 | 10.8 | 3.5 |
| 2011 | 10.9 | 6.0 | 6.1 |
| 2012 | 24.4 | 14.9 | 5.7 |
| 2013 | 24.2 | 21.2 | 5.4 |
| 2014 | 11.0 | 8.9 | 5.3 |
| 2015 | 10.5 | 8.0 | 5.2 |
| 2016 | 0.4 | 1.7 | 6.8 |
| 2017 | 8.0 | 11.6 | 4.7 |
| 2018 | -3.1 | -4.5 | 4.5 |
| 2019 | 12.2 | 8.7 | 4.0 |
| 2020 | 10.6 | 5.3 | 3.1 |
| 2021 (to 31/Mar) | 4.5 | 7.9 | 1.4 |
| Benchmark |
The market value weighted average total return of the South African – Multi-Asset – High Equity unit trust sector, excluding Foord Balanced Fund. |
| Time horizon |
Longer than five years. |
| Inception date |
1 September 2002 |
| Minimum investment |
R50 000 lump sum or R1 000 per month |
| Significant restrictions |
Maximum equity exposure of 75%: maximum offshore exposure of 30%; complies with pension fund investment regulations (Regulation 28). |
| Income distributions |
End-February and end-August each year. |
| Income characteristics |
Medium yield, approximately double that of a general equity fund. Income distributions are reduced by the annual service charge, which varies with the relative performance of the fund against its benchmark. |
| Portfolio orientation |
Medium to high weighting in JSE shares and includes exposure to listed property, commodity securities, bonds, money market instruments and foreign assets. |
| Foreign assets |
Foreign asset exposure is obtained predominantly via Foord International Fund (FIF) and Foord Global Equity Fund Luxembourg (FGEFL), sub-funds of Foord SICAV domiciled in Luxembourg and Foord Global Equity Fund (FGEF) domiciled in Singapore. FIF is a conservative, multi-asset class fund. FGEF and FGEL comprise portfolios of global shares and cash. All funds are priced in US dollars. |
| Risk of loss |
Lower than that of a pure equity fund. High in periods shorter than six months, lower in periods greater than one year. |
| Security description | Asset class | Market | Portfolio weight % |
|---|---|---|---|
| Foord Global Equity Fund | Foreign assets | LU/SG | 17.5 |
| Foord International Fund | Foreign assets | LU | 11.1 |
| RSA 10.5% (R186) | Gov bonds | ZA | 9.8 |
| Naspers "N" | Equity | ZA | 5.1 |
| BHP Group | Equity | ZA | 4.9 |
| NewGold | Commodity | ZA | 3.9 |
| Aspen | Equity | ZA | 3.5 |
| Anheuser-Busch | Equity | ZA | 3.3 |
| FirstRand | Equity | ZA | 3.3 |
| CF Richemont | Equity | ZA | 3.1 |
Monthly Commentary – March 2021
- Global equities (+2.7% in US dollars) rose on expectations for accelerating global growth following vaccine rollouts, further stimulus measures and ongoing accommodative monetary policy—developed market equities (+3.3%) outperformed while the emergence of more virulent COVID-19 strains weighed on emerging markets (-1.5%)
- Developed market bond yields rose again on higher inflation expectations—even as the US Federal Reserve downplayed inflation risks and reiterated its commitment to accommodative policy until unemployment and inflation exceeded its targets
- Industrial commodities oil (-3.9%) and copper (-2.2%) retraced on US dollar strength—precious metals gold (-0.8%) and silver (-10.1%) declined on the opportunity cost of higher bond yields and the benign inflation outlook from central banks
- The fund’s foreign investments detracted most from performance—on rand strength and retracement by the fund’s Chinese tech names after a strong recent run
- The FTSE/JSE Capped All Share Index (+2.0% in rands) rose on broad-based strength—industrials (+1.9%), financials (+1.7%) and resources (+1.2%) all posted positive returns after Q4 2020 economic growth surprised and on expectations for robust economic growth this year
- The fund’s SA equities gained, with Anheuser-Busch InBev (+6.4%), The Foschini Group (+17.0%) and FirstRand (+4.9%) contributing most—partially offset by Standard Bank (-5.7%) on an earnings’ miss and BHP Group (-7.4%) and the NewGold ETF (-4.2%) on the stronger rand and weaker commodity prices
- The All Bond Index (-2.5%) declined with the yield curve steepening as longer maturity bond yields followed US Treasury yields higher—the SA listed property sector (+1.2%) rose with fund staple Capital & Counties (-4.2%) retracing after its rapid rise (+26.1%) last month
- The rand (+2.3% vs the US dollar) bucked emerging market currency weakness as Q4 2020 GDP growth surprised—the lack of competitiveness and strained public finances continue to make the currency vulnerable over the longer term
The fee is a performance based fee that varies around the at-benchmark fee rate as disclosed on the fact sheet. The daily fee rate is adjusted up or down based on the portfolio’s one-year rolling return relative to that of its benchmark. Minimum fee rates apply. Fees accrue in the Foord global funds as disclosed.
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