Foord Conservative Fund
For conservative, medium-term investors in South African retirement fund products
Managed to comply with the statutory investment limits set for retirement funds in South Africa, the fund aims to provide conservative, medium-term investors with inflation-beating returns over rolling three-year periods.
FOR SOUTH AFRICAN INVESTORS
• With a conservative risk profile
• Close to or in retirement
• Seeking medium-term, inflation-beating returns
• Over time horizons of less than five years.
• From a South African retirement fund investment product (Reg 28).
|Year||Fund Return %||Benchmark Return %||SA Inflation %|
|2020 (to 30/Sep)||5.6||6.9||2.6|
CPI +4% per annum, which is applied daily using the most recently available inflation data and accordingly will be lagged on average by five to six weeks.
Shorter than five years.
2 January 2014
R50 000 lump sum or R1 000 per month
Maximum equity exposure of 60%: maximum offshore exposure of 30%; complies with pension fund investment regulations (Regulation 28).
End-February and end-August each year.
Typically more than double that of the FTSE/JSE All Share Index dividend yield. The income yield is affected by the level of performance fees accrued.
Typically a medium to low weighting in JSE shares and includes exposure to listed property, commodity securities, bonds, money market instruments and foreign assets.
Foreign asset exposure is obtained predominantly via Foord International Fund (a conservative, multi-asset class fund), sub-fund of Foord SICAV domiciled in Luxembourg and Foord Global Equity Fund (a portfolio of global shares and cash), domiciled in Singapore. Both funds are priced in US dollars.
|Risk of loss||
Medium in periods shorter than six months. Low in periods greater than one year.
|Security description||Asset class||Market||Portfolio weight %|
|Foord International Fund||Foreign assets||LU||17.4|
|Foord Global Equity Fund||Foreign assets||SG||15.5|
|RSA 10.5% (R186)||Gov bonds||ZA||10.5|
|RSA 8.875% (R2035)||Gov bonds||ZA||4.6|
Monthly Commentary – September 2020
- Global equities (-3.2% in US dollars) fell for the first time in six months, weighed down by benchmark-heavy tech stocks—on worries that high unemployment levels and expiring stimulus measures could weigh on growth
- Global developed market sovereign bond yields fell modestly—at its mid-month meeting the US Federal Reserve signalled continued dovishness with no rate hikes expected until 2023
- The US dollar strengthened against most majors, weighing on emerging markets and commodities—gold (-4.1%) retraced some of its recent gains and oil (-9.6%) tumbled on lower demand
- The FTSE/JSE Capped All Share Index (-1.2% in rands) was led lower by resources stocks (-3.4%) on lower prices while financial counters (+2.3%) rallied from oversold levels—investments in FirstRand (+9.0%), British American Tobacco (+5.4%) and Spar Group (+17.3%) contributed to returns while Aspen (-12.1%) and brewer Anheuser-Busch Inbev (-7.8%) detracted
- The All Bond Index was unchanged, but SA listed property stocks (-3.0%) fell again—the fund’s large holding in the mid-duration R186 bond (+1.5%) again outperformed the ALBI but UK property counter Capco (-12.8%) was a big detractor
- The rand (+1.1% vs the US dollar) gained materially against the dollar but lost ground latterly on risk off sentiment as fears of renewed European COVID-19 lockdowns mounted—foreign assets (-5.6%) were the biggest detractors from performance in the month
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, but no fees are levied when the annual net return falls below zero. Fees accrue in the Foord global funds as disclosed.
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