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 (to 31/Jul) | 6.8 | -0.3 | 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 | 20.6 |
| Foord International Fund | Foreign assets | LU | 14.7 |
| RSA 10.5% (R186) | Gov bonds | ZA | 11.9 |
| NewGold | Commodity | ZA | 5.0 |
| BHP Group | Equity | ZA | 5.0 |
| Naspers "N" | Equity | ZA | 3.7 |
| Anheuser-Busch | Equity | ZA | 3.2 |
| Aspen | Equity | ZA | 3.2 |
| CF Richemont | Equity | ZA | 2.7 |
| FirstRand | Equity | ZA | 2.5 |
Monthly Commentary – July 2020
- Global equities (+5.3% in US dollars) rose as earnings season produced better-than-feared results and hopes for a COVID-19 vaccine grew on promising early trial results—emerging markets (+8.9%) outperformed on dollar weakness and increased global risk appetite
- US (+5.9%) and European (+3.9%) bourses advanced again despite rising second wave pandemic infection rates clouding the economic outlook—supported by the EU resolution on €750 billion of fiscal stimulus and a Republican proposal for a further $1 trillion package in the US
- Most commodities including copper (+6.8%) and oil (+5.2%) gained—the US dollar index (-4.4%) had its worst month since 2010 prompting technical break-outs in gold (+9.5%) and silver (+34.9%)
- The FTSE/JSE Capped All Share Index (+2.9% in rands) was led higher by resources (+9.0%) with financials (+0.4%) flat and industrials (-1.3%) weaker—holdings in physical gold ETF NewGold (+8.5%), Anheuser-Busch Inbev (+10.3%) and BHP Group (+4.0%) contributed to returns while industrials British American Tobacco (-12.3%) and Aspen (-7.7%) detracted
- The All Bond Index (+0.6%) rose despite further yield curve steepening with short dated yields pulled down by SARB’s quarter-point repo rate—core holding in the shorter duration R186 (+1.5%) outperformed as market participants continue to price in higher South African sovereign risk over the longer dated debt maturities
- Listed property (-3.2%) declined after June’s bounce—the fund has a low allocation to the sector via London-listed property stock Capital & Counties and select domestic niche warehouse and distribution property companies
- The rand (+1.6%) appreciated on positive emerging market sentiment and dollar weakness but has declined 17.9% this year and remains vulnerable longer term—despite rand strength, the allocation to foreign assets (+2.4% in rand) was the largest contributor to fund returns
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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