Foord Flexible Fund of Funds
For unconstrained investors seeking long-term inflation-beating returns
INVESTMENT OBJECTIVE
Exploiting the benefits of global diversification, the fund aims to provide investors with an after-fee return of 5% per annum above SA inflation.
FOR SOUTH AFRICAN INVESTORS
• With a moderate risk profile
• Seeking long-term inflation-beating returns over periods exceeding five years
• Requiring balanced exposure to South African and global investments.
FUND MANAGERS
| Year | Fund Return % | Benchmark Return % | SA Inflation % |
|---|---|---|---|
| 2008 (from 01/Apr) | -8.5 | 13.9 | 5.4 |
| 2009 | 15.1 | 10.8 | 6.3 |
| 2010 | 19.7 | 8.6 | 3.5 |
| 2011 | 16.7 | 11.2 | 6.1 |
| 2012 | 29.9 | 11.1 | 5.7 |
| 2013 | 40.7 | 10.6 | 5.4 |
| 2014 | 9.3 | 11.0 | 5.3 |
| 2015 | 21.9 | 10.0 | 5.2 |
| 2016 | -3.7 | 11.8 | 6.8 |
| 2017 | 5.4 | 10.0 | 4.7 |
| 2018 | -1.2 | 10.1 | 4.5 |
| 2019 | 13.7 | 8.9 | 4.0 |
| 2020 (to 30/Apr) | 11.1 | 3.4 | 1.6 |
| Benchmark |
CPI +5% per annum, which is applied daily using the most recently available inflation data and accordingly will be lagged on average by 5 to 6 weeks |
| Time horizon |
Longer than five years. |
| Inception date |
1 April 2008 |
| Minimum investment |
R50 000 lump sum or R1 000 per month |
| Significant restrictions |
None. The fund is unconstrained. |
| Income distributions |
End-February and end-August each year. |
| Income characteristics |
Low to medium income yield depending on the asset allocation strategy employed as the foreign asset component is invested in roll-up funds which do not distribute their income. Income distributions are reduced by the annual service charge, which varies with the relative performance of the fund against the benchmark. |
| Portfolio orientation |
Exploiting the benefits of global diversification, the portfolio continually reflects Foord’s prevailing best investment view on all available asset classes in South Africa and around the world. |
| Foreign assets |
Foreign asset exposure is obtained predominantly via Foord International Fund (a conservative, multi-asset class fund) and Foord Global Equity Fund Luxembourg (a portfolio of global shares and cash). Both funds are sub-funds of Foord SICAV domiciled in Luxembourg and are priced in US dollars. |
| Risk of loss |
Lower than that of a pure equity fund. High in periods shorter that six months, lower in periods greater than one year. |
| Security description | Asset class | Market | Portfolio weight % |
|---|---|---|---|
| RSA 10.5% (R186) | Gov bonds | ZA | 10.0 |
| RSA 8.0% (R2030) | Gov bonds | ZA | 3.9 |
| Alphabet Inc | Equity | US | 2.8 |
| Anheuser-Busch | Equity | ZA | 2.7 |
| FMC Corp | Equity | US | 2.5 |
| RSA 8.75% (R2048) | Gov bonds | ZA | 2.5 |
| Wheaton Precious Metals | Equity | US | 2.5 |
| Bayer | Equity | DE | 2.4 |
| JD.Com Inc | Equity | US | 2.4 |
| Aspen | Equity | ZA | 2.2 |
Monthly Commentary – April 2020
- Global equities (+10.7% in US dollars) rebounded off the March lows to post the best one-month gain since 1987 – US bourses (+13.1%) led developed markets (+10.9%) higher after unprecedented fiscal and monetary stimulus in support of faltering economies
- The FTSE/JSE Capped All Share Index (+14.2% in rands) also rallied, with resources (23.0%) led higher by the gold and platinum mining sectors – financials (+11.9%) and industrials (+9.6%) tracked global bourses higher, while SA listed property (+7.0%) lagged
- The All Bond Index (+3.9%) gained as yields moved down sharply on the lower repo rate and improved investor sentiment off the March trough – the high coupon, shorter duration R186 government bond (+7.7%) contributed meaningfully to portfolio returns
- Oil (+11.1%) gained but remains under pressure given the 25-30% collapse in near-term demand despite major producers agreeing a 10% supply cut – the WTI oil price went negative for a brief period on a futures related technicality given almost-full land-based storage facilities in the US
- Leading precious metals miner Wheaton Precious Metals (+37.2%) was a big performance contributor, driven by increases in gold (+6.4%) and silver (+10.1%) – while Mesoblast (+159%) surged after its remestemcel-L treatment achieved meaningful results in treating a small sample of severe COVID-19 patients and progressed to comprehensive trials
- The rand (-3.9% vs the US dollar) weakened more as the economic shock of the extended lockdown compounds South Africa’s structural growth challenges – S&P downgraded SA debt further into sub-investment grade on forecasts of accelerating deterioration of public finances
- The portfolio is well-positioned for the current market environment, with a preference for global over SA Inc. companies and defensive, core holding in high-yielding SA government bonds – the excellent absolute performance over March’s selloff and April’s bear-market rally without any major portfolio changes bears testament to this fine balance
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.
WHAT IF YOU HAD INVESTED WITH US IN THE PAST?
Experience the compounding phenomenon of a sustained, long-term investment with Foord.
Insights
24 Apr 2020
Politics of oil
There has been a seismic change in global oil markets, with potentially devastating long-term risks to the global economy and geopolitics. Portfolio manager and resources analyst MIKE TOWNSHEND looks at the politics…
09 Apr 2020
THE PIN THAT POPPED THE BUBBLE
Global equity markets delivered the best calendar-year return of the decade in 2019. Many markets were at or near all-time highs. In this podcast, Nick Curtin talks to Foord Singapore portfolio manager Brian Arcese…