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/Jun) | 13.3 | 4.8 | 1.0 |
| 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 | 9.1 |
| RSA 8.0% (R2030) | Gov bonds | ZA | 4.4 |
| NewGold | Commodity | ZA | 3.7 |
| Wheaton Precious Metals | Equity | US | 3.0 |
| Anheuser-Busch | Equity | ZA | 3.0 |
| FMC Corp | Equity | US | 2.7 |
| Alphabet Inc | Equity | US | 2.7 |
| RSA 8.75% (R2048) | Gov bonds | ZA | 2.6 |
| JD.Com Inc | Equity | US | 2.5 |
| Aspen | Equity | ZA | 2.5 |
Monthly Commentary – July 2020
- Global equities (+5.3% in US dollars) rose on decent earnings, pharmaceutical companies reporting promising early COVID-19 vaccine trial results and further massive fiscal stimulus announcements in the US and EU—emerging markets (+8.9%) outperformed on dollar weakness while US (+5.9%) and European (+3.9%) bourses rose despite rising second wave pandemic infection rates clouding the economic outlook
- Most commodities including copper (+6.8%) and oil (+5.2%) gained, supported by the US and European stimulus announcements—the US dollar index (-4.4%) had its worst month since 2010 prompting technical break-outs in gold (+9.5%) and silver (+34.9%)
- The Foord global funds’ outperformance was maintained despite the very narrow market—the top five US tech companies have gained more than 35% this year and now account for 20% of the S&P 500, while the index’s remaining constituents have fallen approximately 5% in an increasingly bifurcated and risky market
- The FTSE/JSE Capped All Share Index (+2.9% in rands) was led higher by resources (+9.0%) with financials (+0.4%) flat and industrials (-1.3%) weaker—holdings in physical gold ETF NewGold (+8.5%), Anheuser-Busch Inbev (+10.3%) and BHP Group (+4.0%) contributed to returns while industrials Italtile (-13.9%) and Aspen (-7.7%) detracted
- The All Bond Index (+0.6%) rose as the yield curve continued to steepen with short dated yields pulled down by SARB’s quarter-point repo rate—core holding in the shorter duration R186 (+1.5%) outperformed as markets continue to price in higher South African sovereign debt risk over the longer dated debt maturities
- Listed property (-3.2%) declined after June’s bounce—the fund has a low allocation to the sector via London-listed property stock Capital & Counties
- The rand (+1.6%) appreciated on positive emerging market sentiment and dollar weakness but has declined 17.9% this year and remains vulnerable longer term—despite rand strength, the allocation to foreign assets (+2.6% in rand) was the largest contributor to fund returns
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.
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