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/Sep) | 13.2 | 7.7 | 2.6 |
| 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 | 9.4 |
| RSA 8.0% (R2030) | Gov bonds | ZA | 4.5 |
| NewGold | Commodity | ZA | 3.6 |
| Anheuser-Busch | Equity | ZA | 2.9 |
| JD.Com Inc | Equity | US | 2.9 |
| FMC Corp | Equity | US | 2.7 |
| Wheaton Precious Metals | Equity | US | 2.7 |
| Alphabet Inc | Equity | US | 2.6 |
| RSA 8.75% (R2048) | Gov bonds | ZA | 2.5 |
| Aspen | Equity | ZA | 2.3 |
Monthly Commentary – September 2020
- Global equities (-3.2% in US dollars) fell for the first time in six months, weighed down by benchmark-heavy tech stocks—on worries that high unemployment levels and expiring stimulus measures could weigh on growth
- Global developed market sovereign bond yields fell modestly—at its mid-month meeting the US Federal Reserve signalled continued dovishness with no rate hikes expected until 2023
- The US dollar strengthened against most majors, weighing on emerging markets and commodities—gold (-4.1%) retraced some of its recent gains and oil (-9.6%) tumbled on lower demand
- The fund’s holding in leading gold and silver streamer Wheaton Precious Metals (-8.1%) and ETFS physical gold (-3.6%) detracted from performance on precious metals weakness while core holding Alphabet (-10.1%) fell—but the fund’s non-tech Chinese investments mostly added value
- The FTSE/JSE All Share Index (-1.6% in rands) was led lower by resources stocks (-3.4%) on lower prices while financial counters (+2.3%) rallied from oversold levels—the investment in FirstRand (+9.0%) contributed to returns while Aspen (-12.1%) and brewer Anheuser-Busch Inbev (-7.8%) detracted
- The All Bond Index was unchanged, but SA listed property stocks (-3.0%) fell again—the fund’s large holding in the mid-duration R186 bond (+1.5%) again outperformed the ALBI but UK property counter Capco (-12.8%) was a big detractor
- The rand (+1.1% vs the US dollar) gained materially against the dollar but lost ground latterly—on risk off sentiment as fears of renewed European COVID-19 lockdowns mounted
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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