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|
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||5.8|
|RSA 8.0% (R2030)||Gov bonds||ZA||4.6|
|RSA 9.0% (R2040)||Gov bonds||ZA||2.8|
Monthly Commentary – December 2020
- Global equities (+4.2% in US dollars) again reached new highs on the first COVID-19 vaccine approvals by US, UK, and EU regulators and the passage in the US of a $900 billion pandemic relief bill—emerging markets (+7.2%) outperformed on the improving global economic sentiment
- European sovereign bond yields trended lower on reaccelerating COVID-19 infections and US yields edged higher on a modest improvement in US employment and COVID-19 vaccine approvals—the US dollar continued to weaken against most major and emerging market currencies
- Industrial commodities including oil (+8.9%), copper (+2.7%) and iron ore (+25.1%) rose on expectations that COVID-19 vaccines may result in higher global growth in 2021—precious metals gold (+6.6%) and silver (19.6%) rebounded after three months of retreat
- Fund performance was supported by contributions from Baidu (+55.6%), Moncler (+24.6%), Hong-Kong property developer Wharf REIC (+11.9%) and Freeport-McMoran (+11.2%)—Chinese insurer PICC Property & Casualty (-8.3%), Alphabet (-0.5%), Tencent (+0.2%) and Nutrien (-1.3%) were the detractors
- The FTSE/JSE Capped All Share Index (+4.9% in rands) was buoyed by the positive global emerging markets sentiment and net foreign buying—resources (+9.5%) and financials (+8.3%) advanced while industrials (-1.0%) lagged
- The fund’s JSE equity investments underperformed given the low allocation to the resources sector and to listed property (+13.7%)—core holdings in BHP Group (+9.7%) and FirstRand (+12.3%) contributed meaningfully, while the allocation to large cap rand hedge Anheuser-Busch InBev (-0.1%) underperformed on rand strength
- The All Bond Index (+2.4%) advanced as positive emerging markets sentiment resulted in lower long bond yields and a flatter yield curve—the fund’s core investment in the 3-7-year sector (+2.4%) again contributed meaningfully to returns and is still the managers’ preferred yield curve position
- The rand (+5.0% vs the US dollar) gained on broad-based dollar weakness and positive emerging markets sentiment on COVID-19 vaccine news and expectations for accelerating global economic growth in 2021—despite recent dollar weakness, the rand (-5.0%) is weaker over 2020 and remains vulnerable over the 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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