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 %|
|2021 (to 31/Mar)||3.0||2.4||1.4|
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||14.3|
|Foord Global Equity Fund||Foreign assets||SG||14.3|
|RSA 10.5% (R186)||Gov bonds||ZA||8.9|
|RSA 8.0% (R2030)||Gov bonds||ZA||8.1|
|RSA 8.875% (R2035)||Gov bonds||ZA||4.3|
|RSA 8.25% (R2032)||Gov bonds||ZA||2.9|
Monthly Commentary – March 2021
- Global equities (+2.7% in US dollars) rose on expectations for accelerating global growth following vaccine rollouts, further stimulus measures and ongoing accommodative monetary policy—developed market equities (+3.3%) outperformed while the emergence of more virulent COVID-19 strains weighed on emerging markets (-1.5%)
- Developed market bond yields rose again on higher inflation expectations—even as the US Federal Reserve downplayed inflation risks and reiterated its commitment to accommodative policy until unemployment and inflation exceeded its targets
- Industrial commodities oil (-3.9%) and copper (-2.2%) retraced on US dollar strength—precious metals gold (-0.8%) and silver (-10.1%) declined on the opportunity cost of higher bond yields and the benign inflation outlook from central banks
- The fund’s foreign investments detracted most from performance—on rand strength and retracement by the fund’s Chinese tech names after a strong recent run
- The FTSE/JSE Capped All Share Index (+2.0% in rands) rose on broad-based strength—industrials (+1.9%), financials (+1.7%) and resources (+1.2%) all posted positive returns after Q4 2020 economic growth surprised and on expectations for robust economic growth this year
- The fund’s SA equities gained, with Anheuser-Busch InBev (+6.4%), Spurcorp (+18.2%) and FirstRand (+4.9%) contributing most—partially offset by Standard Bank (-5.9%) on an earnings’ miss and BHP Group (-7.4%) and the NewGold ETF (-4.2%) on the stronger rand and weaker commodity prices
- The All Bond Index (-2.5%) declined with the yield curve steepening as longer maturity bond yields followed US Treasury yields higher—the SA listed property sector (+1.2%) rose with fund staple Capital & Counties (-4.2%) retracing after its rapid rise (+26.1%) last month
- The rand (+2.3% vs the US dollar) bucked emerging market currency weakness as Q4 2020 GDP growth surprised—the lack of competitiveness and strained public finances continue to make the currency 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, 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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