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Foord Flexible Fund of Funds

For unconstrained investors seeking long-term inflation-beating returns

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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.

Performance

Returns
Year Fund Return % Benchmark Return % SA Inflation %
2008 (from 01/Apr) -8.5 9.1 5.4
2009 15.1 11.3 6.3
2010 19.7 8.5 3.5
2011 16.7 11.1 6.1
2012 29.9 10.7 5.7
2013 40.7 10.4 5.4
2014 9.3 10.3 5.3
2015 21.9 10.2 5.2
2016 -3.7 11.8 6.8
2017 5.4 9.7 4.7
2018 -1.2 9.5 4.5
2019 13.7 9.0 4.0
2020 16.4 8.1 3.1

Characteristics
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.

Top 10
Security description Asset class Market Portfolio weight %
RSA 10.5% (R186) Gov bonds ZA 5.8
RSA 8.0% (R2030) Gov bonds ZA 4.6
NewGold Commodity ZA 3.8
Anheuser-Busch Equity ZA 3.5
RSA 9.0% (R2040) Gov bonds ZA 2.8
BHP Group Equity ZA 2.7
Aspen Equity ZA 2.6
Alphabet Inc Equity US 2.6
JD.Com Inc Equity US 2.5
FMC Corp Equity US 2.2
Commentary

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
  • Fund performance was supported by contributions from Baidu (+55.6%), Moncler (+24.6%), Hong-Kong property developer Wharf REIC (+11.9%) and Freeport-McMoran (+11.2%)—Chinese insurer PICC Property & Casualty (-8.3%), Alphabet (-0.5%), Tencent (+0.2%) and Nutrien (-1.3%) were the detractors
  • 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 the resources sector and to listed property (+13.7%)—core holdings in BHP Group (+9.7%) and FirstRand (+12.3%) contributed meaningfully, while the allocation to large cap rand hedge Anheuser-Busch InBev (-0.1%) 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 (+2.4%) 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
Fees

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.

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Currency
Using rand returns of Foord’s best investment view South African funds. ? In calculating the current value of your hypothetical investment, we have applied the returns of Foord Asset Management’s retirement fund track record from 1 January 1990 to 31 March 2008 (gross of fees) combined with the net returns of the Foord Flexible Fund of Funds from 1 April 2008. Any information provided is not intended nor does it constitute financial, tax, legal, investment, or other type of advice, and the suitability or potential value of any information or particular investment source is not guaranteed. Performance may be affected by changes in the market or economic conditions and legal, regulatory and tax requirements. Distributions may be subject to mandatory withholding taxes. Foord does not provide any guarantee either with respect to the capital or the performance return of investments.
Using US dollar returns of Foord’s best investment view global fund. ? In calculating the current value of your investment, we have applied the long-term returns of the Foord International Trust. These returns are calculated net of fees. Past performance is no guarantee of future performance. Foord Asset Management (Singapore) Pte. Limited disclaims any liability for any loss, liability, or damages (whether direct or consequential) of any nature whatsoever that may be suffered as a result of, or which may be attributable, directly or indirectly to the use of or reliance upon the information provided.
Value Today: R0
Annualised Return: 0%
The annualised return is the effective annual percentage return achieved over the term of the investment. Results for an investment term of less than one year should be treated with caution.

Insights

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Year in review

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