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 |
| 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 | 11.5 |
| RSA 10.5% (R186) | Gov bonds | ZA | 10.0 |
| BHP Group | Equity | ZA | 4.8 |
| Naspers "N" | Equity | ZA | 4.6 |
| NewGold | Commodity | ZA | 4.4 |
| Anheuser-Busch | Equity | ZA | 3.6 |
| FirstRand | Equity | ZA | 3.3 |
| Aspen | Equity | ZA | 3.2 |
| CF Richemont | Equity | ZA | 3.2 |
Monthly Commentary – December 2020
- Global equities (+4.2% in US dollars) again reached new highs on the first COVID-19 vaccine approvals by US, UK, and EU regulators and the passage in the US of a $900 billion pandemic relief bill—emerging markets (+7.2%) outperformed on the improving global economic sentiment
- European sovereign bond yields trended lower on reaccelerating COVID-19 infections and US yields edged higher on a modest improvement in US employment and COVID-19 vaccine approvals—the US dollar continued to weaken against most major and emerging market currencies
- Industrial commodities including oil (+8.9%), copper (+2.7%) and iron ore (+25.1%) rose on expectations that COVID-19 vaccines may result in higher global growth in 2021—precious metals gold (+6.6%) and silver (19.6%) rebounded after three months of retreat
- The FTSE/JSE Capped All Share Index (+4.9% in rands) was buoyed by the positive global emerging markets sentiment and net foreign buying—resources (+9.5%) and financials (+8.3%) advanced while industrials (-1.0%) lagged
- The fund’s JSE equity investments underperformed given the low allocation to listed property (+13.7%) and the resources sector although core holding BHP Group (+9.6%) contributed meaningfully—the investment in FirstRand (+12.2%) was positive while the allocation to large cap rand hedges Anheuser-Busch InBev (-0.1%), Richemont (+1.0%) and British American Tobacco (+2.1%) underperformed on rand strength
- The All Bond Index (+2.4%) advanced as positive emerging markets sentiment resulted in lower long bond yields and a flatter yield curve—the fund’s core investment in the 3-7-year sector (+2.5%) again contributed meaningfully to returns and is still the managers’ preferred yield curve position
- The rand (+5.0% vs the US dollar) gained on broad-based dollar weakness and positive emerging markets sentiment on COVID-19 vaccine news and expectations for accelerating global economic growth in 2021—despite recent dollar weakness, the rand (-5.0%) is weaker over 2020 and remains 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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