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 | 9.1 | 5.4 |
| 2009 | 15.1 | 11.3 | 6.3 |
| 2010 | 19.7 | 8.5 | 3.5 |
| 2011 | 16.7 | 11.1 | 6.1 |
| 2012 | 29.9 | 10.7 | 5.7 |
| 2013 | 40.7 | 10.4 | 5.4 |
| 2014 | 9.3 | 10.3 | 5.3 |
| 2015 | 21.9 | 10.2 | 5.2 |
| 2016 | -3.7 | 11.8 | 6.8 |
| 2017 | 5.4 | 9.7 | 4.7 |
| 2018 | -1.2 | 9.5 | 4.5 |
| 2019 | 13.7 | 9.0 | 4.0 |
| 2020 | 16.4 | 8.1 | 3.1 |
| 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 | 5.8 |
| RSA 8.0% (R2030) | Gov bonds | ZA | 4.6 |
| NewGold | Commodity | ZA | 3.8 |
| Anheuser-Busch | Equity | ZA | 3.5 |
| RSA 9.0% (R2040) | Gov bonds | ZA | 2.8 |
| BHP Group | Equity | ZA | 2.7 |
| Aspen | Equity | ZA | 2.6 |
| Alphabet Inc | Equity | US | 2.6 |
| JD.Com Inc | Equity | US | 2.5 |
| FMC Corp | Equity | US | 2.2 |
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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