Foord Flexible Fund of Funds
For unconstrained investors seeking long-term inflation-beating returns
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.
|Year||Fund Return %||Benchmark Return %||SA Inflation %|
|2008 (from 01/Apr)||-8.5||9.1||5.4|
|2021 (to 30/Jun)||5.2||5.1||2.7|
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
Longer than five years.
1 April 2008
R50 000 lump sum or R1 000 per month
None. The fund is unconstrained.
End-February and end-August each year.
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.
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 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||5.2|
|RSA 8.0% (R2030)||Gov bonds||ZA||4.3|
|RSA 9.0% (R2040)||Gov bonds||ZA||2.7|
Monthly Commentary – June 2021
- Developed (+1.4% in US dollars) and emerging (+1.3%) markets were led higher by US bourses (+2.8%) on strong economic data and vaccination rollouts—after first taking fright when the US Federal Reserve brought forward to 2023 the date by when it expected US interest rates would first rise
- Developed market bond yields declined despite US and Eurozone inflation rising faster than expectations—the Fed attributes the rise in inflation to what it thinks are transitory factors
- Oil (+8.4%) rose above $70 a barrel for the first time in two years after OPEC+ signalled strong demand amid managed supply—precious metals gold (-6.9%) and silver (-6.7%) and industrial bellwether copper (-7.6%) fell sharply on easing inflation concerns and dollar strength
- The large allocation to foreign assets contributed most to performance with the rand retracing some of its recent gains—Biolife Solutions (+33.6% in US dollars) and Alphabet (+6.5%) were the top performers while resources companies Freeport-McMoran (-12.7%) and Pan American Silver (-12.9%)
- The FTSE/JSE Capped All Share Index (-2.5% in rands) was dragged lower by sharp falls in resources (-6.4%) and financials (-3.0%), with only the industrials sector (+0.4%) registering a small gain—the fund’s SA equities detracted but outperformed the market index, mostly driven by the under-weight allocation to the weaker resources sector
- The All Bond Index (+1.1%) gained as the yield curve flattened with longer dated bonds outperforming—the fund’s bond allocation remains concentrated in the 3-7-year maturity bucket but the managers have been investing in longer dated instruments at the margin as relative valuations shift
- The rand (-4.0% vs the US dollar) retraced some its recent gains on dollar strength, lower commodity prices and a rampant COVID-19 third wave—while further short-term strength is possible, the unit remains structurally vulnerable 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.
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