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 %|
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||14.4|
|Foord Global Equity Fund||Foreign assets||SG||14.0|
|RSA 10.5% (R186)||Gov bonds||ZA||6.6|
|RSA 8.875% (R2035)||Gov bonds||ZA||4.0|
|RSA 8.0% (R2030)||Gov bonds||ZA||2.1|
Monthly Commentary – December 2020
- Global equities (+4.2% in US dollars) again reached new highs on the first COVID-19 vaccine approvals by US, UK, and EU regulators and the passage in the US of a $900 billion pandemic relief bill—emerging markets (+7.2%) outperformed on the improving global economic sentiment
- European sovereign bond yields trended lower on reaccelerating COVID-19 infections and US yields edged higher on a modest improvement in US employment and COVID-19 vaccine approvals—the US dollar continued to weaken against most major and emerging market currencies
- Industrial commodities including oil (+8.9%), copper (+2.7%) and iron ore (+25.1%) rose on expectations that COVID-19 vaccines may result in higher global growth in 2021—precious metals gold (+6.6%) and silver (19.6%) rebounded after three months of retreat
- The FTSE/JSE Capped All Share Index (+4.9% in rands) was buoyed by the positive global emerging markets sentiment and net foreign buying—resources (+9.5%) and financials (+8.3%) advanced while industrials (-1.0%) lagged
- The fund’s JSE equity investments underperformed given the low allocation to listed property (+13.7%) and the resources sector although core holding BHP Group (+9.6%) contributed meaningfully—the investment in FirstRand (+12.2%) was positive while the allocation to large cap rand hedges Anheuser-Busch InBev (-0.1%), Richemont (+1.0%) and British American Tobacco (+2.1%) underperformed on rand strength
- The All Bond Index (+2.4%) advanced as positive emerging markets sentiment resulted in lower long bond yields and a flatter yield curve—the fund’s core investment in the 3-7-year sector (+2.5%) again contributed meaningfully to returns and is still the managers’ preferred yield curve position
- The rand (+5.0% vs the US dollar) gained on broad-based dollar weakness and positive emerging markets sentiment on COVID-19 vaccine news and expectations for accelerating global economic growth in 2021—despite recent dollar weakness, the rand (-5.0%) is weaker over 2020 and remains 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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