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||13.9||5.4|
|2020 (to 30/Jun)||13.3||4.8||1.0|
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||9.1|
|RSA 8.0% (R2030)||Gov bonds||ZA||4.4|
|Wheaton Precious Metals||Equity||US||3.0|
|RSA 8.75% (R2048)||Gov bonds||ZA||2.6|
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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