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Foord Balanced Fund

For long-term investors in South African retirement fund products

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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).

Performance

Returns
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 (to 30/Apr) 2.1 -5.3 1.6

Characteristics
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.

Top 10
Security description Asset class Market Portfolio weight %
Foord Global Equity Fund Foreign assets LU/SG 20.0
Foord International Fund Foreign assets LU 15.5
RSA 10.5% (R186) Gov bonds ZA 13.5
BHP Group Equity ZA 4.5
Newgold Commodity ZA 4.2
Capital & Counties Property ZA 3.1
Aspen Equity ZA 3.0
Anheuser-Busch Equity ZA 2.8
RMB Holdings Equity ZA 2.7
Naspers "N" Equity ZA 2.7
Commentary

Monthly Commentary – April 2020

  • Global equities (+10.7% in US dollars) rebounded off the March lows to post the best one-month gain since 1987 – US bourses (+13.1%) led developed markets (+10.9%) higher after unprecedented fiscal and monetary stimulus in support of faltering economies
  • Emerging markets (+9.2%) gained despite more than 80 countries seeking IMF assistance amid the severe economic demand shock – India (+16.1%) benefitted from the lower oil price improving the country’s fiscal deficit
  • Oil (+11.1%) gained but remains under pressure given the 25-30% collapse in near-term demand despite major producers agreeing a 10% supply cut – the WTI oil price went negative for a brief period on a futures related technicality given almost-full land-based storage facilities in the US
  • The FTSE/JSE Capped All Share Index (+14.2% in rands) also rallied, with resources (23.0%) led higher by the gold and platinum mining sectors – financials (+11.9%) and industrials (+9.6%) tracked global bourses higher, while SA listed property (+7.0%) lagged
  • The All Bond Index (+3.9%) gained as yields moved down sharply on the lower repo rate and improved investor sentiment off the March trough – the high coupon, shorter duration R186 government bond (+7.7%) contributed meaningfully to portfolio returns
  • The rand (-3.9% vs the US dollar) weakened more as the economic shock of the extended lockdown compounds South Africa’s structural growth challenges – S&P downgraded SA debt further into sub-investment grade on forecasts of accelerating deterioration of public finances
  • The portfolio is well-positioned for the current market environment – with a preference for quality JSE-listed global businesses and select global equities over SA Inc. companies and defensive, core holding in high-yielding SA government bonds
  • The excellent relative performance over March’s selloff and April’s bear-market rally without any major portfolio changes bears testament to this fine balance – the fund is now pleasingly provisionally ranked in the top decile of 195 comparable funds over 1 year and top-quartile over 3 years
Fees

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.

WHAT IF YOU HAD INVESTED WITH US IN THE PAST?


Experience the compounding phenomenon of a sustained, long-term investment with Foord.

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Currency
Using rand returns of Foord’s best investment view South African funds. ? In calculating the current value of your hypothetical investment, we have applied the long-term equity carve-out returns of Foord Asset Management's Global Balanced composite from 1 January 1990. These returns are gross of fees and taxes. Any information provided is not intended nor does it constitute financial, tax, legal, investment, or other type of advice, and the suitability or potential value of any information or particular investment source is not guaranteed. Performance may be affected by changes in the market or economic conditions and legal, regulatory and tax requirements. Distributions may be subject to mandatory withholding taxes. Foord does not provide any guarantee either with respect to the capital or the performance return of investments.
Using US dollar returns of Foord’s best investment view global fund. ? In calculating the current value of your investment, we have applied the long-term returns of the Foord International Trust. These returns are calculated net of fees. Past performance is no guarantee of future performance. Foord Asset Management (Singapore) Pte. Limited disclaims any liability for any loss, liability, or damages (whether direct or consequential) of any nature whatsoever that may be suffered as a result of, or which may be attributable, directly or indirectly to the use of or reliance upon the information provided.
Value Today: R0
Annualised Return: 0%
The annualised return is the effective annual percentage return achieved over the term of the investment. Results for an investment term of less than one year should be treated with caution.

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