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Southern Charter BCI Balanced Fund

as at: 
31 March 2017

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Investment Objectives

The Southern Charter BCI Balanced Fund of Funds is a moderate managed fund of funds. The primary investment objective of the portfolio is to provide the investor with a moderate total return. The Fund aims to provide investors with capital growth of 5% above inflation over the longer term by investing in a combination of asset classes including local and international equities, fixed interest, property and cash. As the Fund has a medium allocation growth assets, it is ideal for investors with a medium investment horizon, who seek capital growth and who are at least 5 - 10 years from retirement. The fund is Regulation 28 compliant.

Strategy

The Fund is actively managed with a value bias. By focusing on macro themes, the Fund looks to exploit valuation discrepancies in asset classes. The allocation to equities will be max 60%, depending on economic conditions with a neutral weighting of 50%. The allocation to assets other than equities, aims to reduce the risk of capital loss in the portfolio.

Performance (net of all fees)

FundReturn1 Year3 Years5 Years8 Years
SC Balanced FoF'sCumulative0.7%20.4%67.5%131.9%
CPI + 5%Cumulative11.6%36.9%69.2%159.5%
Benchmark*Cumulative3.3%28.3%78.2%150.8%
SC Balanced FoF'sAnnualised0.7%6.4%10.9%9.8%
CPI + 5%Annualised11.6%11.0%11.1%11.2%
Benchmark*Annualised3.3%8.6%12.3%10.8%

Fund Commentary

The JSE All Share Index returned a total return of 3.8% at quarter end. As a result of the cabinet reshuffle, with Finance Minister Gordhan removed, yields rose sharply across the whole of the yield curve during the last week of March and the JSE All Bond Index ended the quarter with a significantly lower total return of 2.5%, but still slightly higher than the cash return of 1.9%. SA Listed Property had a total return of 1.4% for the first quarter. Global Equities performed well the first quarter, returning 4.5%, as global growth and manufacturing data remain positive.

The rand was the worst performing Emerging Market currency after the cabinet reshuffle and debt downgrade by S&P and Fitch on South Africa's long-term foreign denominated debt from BBB- to BB+, which is a sub-investment grade rating, aka junk. Emerging Market debt is in favour as foreign investors search for yield, which has caused the blowout in the rand and yields to be muted, as yield hungry investors look past the potential solvency issues of South Africa.

Our asset allocation strategy remains focused on building long-term capital growth through investing in a variety of assets, including offshore opportunities. This diversification is key to reducing risk as our portfolios are never positioned for one event only, but to protect and grow your money across a diverse range of macroeconomic and political events that could play out over time.

Asset Allocation - Values displayed in percentage (%)

BenchmarkFund
Int Fixed Income7.5%0.5%
Int Equity7.5%19.4%
Int Property0.0%3.0%
Cash20.0%12.5%
Bonds12.5%17.9%
Property10.0%8.1%
Local Equity42.5%38.6%

Asset Class Performance - Values displayed in percentage (%)

1 YearMonthly
Global Bonds-13.0%2.4%
MSCI World5.2%3.7%
Global Property-9.2%0.7%
Cash7.6%0.6%
ALBI11.0%0.4%
Property1.5%0.1%
ALSI2.5%2.7%
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Time horizon

5 or more years to retirement

Risk Profile

  • Low
  • Low-Mod
  • Mod
  • Mod-High
  • High
Morningstar Rating: 
3.00 Star

Portfolio Managers

CEO & Investment Strategist

Mark Thompson

Chief Investment Officer

Ursula Maritz

(021) 700 1000

 

1st Floor, Silverberg Terrace
Steenberg Office Park
Steenberg Road
Tokai, 7925

FSP No. 740