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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 10.6 5.3 3.1
2021 (to 30/Sep) 10.5 13.3 4.5

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-March and end-September 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 16.2
Foord International Fund Foreign assets LU 12.5
RSA 10.5% (R186) Gov bonds ZA 8.8
Aspen Equity ZA 5.2
BHP Group Equity ZA 4.3
Naspers "N" Equity ZA 4.3
NewGold Commodity ZA 4.0
FirstRand Equity ZA 3.8
Anheuser-Busch Equity ZA 3.1
CF Richemont Equity ZA 2.8
Commentary

Monthly Commentary – September 2021

  • Global equities (-4.1% in US dollars) fell after seven straight months of gains—slowing global economic growth amid growing uncertainties around new COVID-19 variants, Evergrande contagion, energy supply issues in Europe and China, and global supply chain difficulties giving rise to higher inflation all dampened enthusiasm
  • Developed market bond yields rose on worries that rising global inflation may not be as transitory as first believed—while Chairman Powell continues to walk a fine monetary policy line, it is becoming increasingly probable the US Fed will begin its bond tapering program within the next two months and we continue to expect a lift-off in rates sometime in 2022
  • The FTSE/JSE Capped All Share Index (-3.1% in rands) was dragged lower by another sharp fall in the resources sector (-9.3%) on lower industrial and precious metals prices—industrials (-0.8%) also finished lower with financials (+1.7%) pulled up by select banks and life insurance companies
  • Domestic equity was the largest contributor to fund returns with longstanding holding in Aspen (+39.5%) sharply higher and meaningful contributions from mid-cap industrial Omnia (+20.1%) and preferred bank FirstRand (+4.2%)—BHP Group (-9.2%) was the largest detractor although the fund maintains a relatively low allocation to the cyclical resource sector
  • The All Bond Index (-2.1%) fell as yields across the curve moved higher in line with rising global bond yields—the core holding in the short and medium-term sector (-0.6%) outperformed as longer dated maturities suffered steeper losses
  • Foreign assets (-0.2% in rands) detracted marginally with the fall in global equities offset by the weakening currency—the US S&P 500 market index hedges provided some protection while resources stocks and the fund’s Chinese holdings detracted
  • The rand (-3.8% vs the US dollar) weakened on broad-based dollar strength and negative emerging market sentiment with investors now more actively positioning for a moderation of the prevailing accommodative US monetary policy and the subsequent rise in interest rates—the currency remains vulnerable as the short-term platinum group metals price terms of trade bonus starts to dissipate
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 returns of Foord Asset Management’s retirement fund track record from 1 January 1990 to 31 March 2008 (gross of fees) combined with the net returns of the Foord Flexible Fund of Funds from 1 April 2008. 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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