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Retirement Fund Low Equity

Foord's best investment view for discretionary retirement fund portfolios with short-term investment horizons.

OVERVIEW

These mandates invest in a mix of local and foreign asset classes and are managed to comply with the prudential requirements of the South African Pension Funds Act (Regulation 28) with the additional restriction of a maximum 40% in equities. These balanced portfolios reflect Foord’s best investment view for discretionary retirement fund portfolios in terms of asset allocation and security selection, subject to the constraint of a maximum 40% in equities. This strategy is suitable for investors with a maximum investment horizon of  three years. The investment objective is to exceed the South African inflation rate by 3% per annum over rolling three-year periods at the lowest possible risk.

STRATEGY

When saving for retirement, certain circumstances may require additional conservatism. Examples include retirement members who are transitioning into lower risk portfolios or for members who are well into their retirement years. For these funds, a very low equity portfolio that aims to achieve returns that maintain purchasing power while having a low probability of negative returns in any one year may be appropriate. The graph below reflects the rolling one-year actual returns achieved for investors since inception on 1 November 2007 vs the objective of CPI+3% per annum. There are very few occasions when the portfolio failed to achieve its return objective but most importantly investors have never sustained a loss over any one year period – even at the height of the global financial crises that saw markets trough in March 2009. On a cumulative basis, however, the fund remains comfortably ahead of the CPI+3% benchmark.

Long-term real returns

Historic investment returns
Years Composite Return % Benchmark* Return %
1 Year 5.1 8.4
3 Years 9 7.3
5 Years 8 7.3
Since Inception 01 November 2007 10.2 8.5

* Benchmark: CPI + 3%

Performance History

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Performance Overview

Insights

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