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 30/Jun) | 7.5 | 9.9 | 2.7 |
| 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 | 18.0 |
| Foord International Fund | Foreign assets | LU | 12.5 |
| RSA 10.5% (R186) | Gov bonds | ZA | 8.9 |
| BHP Group | Equity | ZA | 4.9 |
| Naspers "N" | Equity | ZA | 4.7 |
| NewGold | Commodity | ZA | 3.8 |
| Aspen | Equity | ZA | 3.7 |
| Anheuser-Busch | Equity | ZA | 3.5 |
| CF Richemont | Equity | ZA | 3.4 |
| FirstRand | Equity | ZA | 3.2 |
Monthly Commentary – June 2021
- Developed (+1.4% in US dollars) and emerging (+1.3%) markets were led higher by US bourses (+2.8%) on strong economic data and vaccination rollouts—after first taking fright when the US Federal Reserve brought forward to 2023 the date by when it expected US interest rates would first rise
- Developed market bond yields declined despite US and Eurozone inflation rising faster than expectations—the Fed attributes the rise in inflation to what it thinks are transitory factors
- Oil (+8.4%) rose above $70 a barrel for the first time in two years after OPEC+ signalled strong demand amid managed supply—precious metals gold (-6.9%) and silver (-6.7%) and industrial bellwether copper (-7.6%) fell sharply on easing inflation concerns and dollar strength
- The FTSE/JSE Capped All Share Index (-2.5% in rands) was dragged lower by sharp falls in resources (-6.4%) and financials (-3.0%), with only the industrials sector (+0.4%) registering a small gain—lower commodity prices and a rampant COVID-19 third wave weighed on sentiment
- The large allocation to foreign assets contributed most to performance with the rand retracing some of its recent gains—despite some attractive domestic opportunities the managers continue to favour the global investment opportunity set and expect the rand to weaken further through the full investment cycle
- The fund’s SA equities were flat, protecting investor capital in a negative month, mostly driven by the under-weight allocation to the weaker resources sector—SA Inc. companies Foschini (+21.8%) and Omnia (+10.8%) were the top contributors on better-than-expected results while Standard Bank (-5.9%) and FirstRand (-4.3%) detracted the most after SA was put into Adjusted Level 4 lockdown
- The All Bond Index (+1.1%) gained as the yield curve flattened with longer dated bonds outperforming—the fund’s bond allocation remains concentrated in the 3-7-year maturity bucket but the managers have been investing in longer dated instruments at the margin as relative valuations shift
- The rand (-4.0% vs the US dollar) retraced some its recent gains on dollar strength, lower commodity prices and a rampant COVID-19 third wave—while further short-term strength is possible, the unit remains structurally vulnerable 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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