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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 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

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 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
Commentary

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
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.

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