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Southern Charter BCI Defensive Fund

as at: 
31 May 2017

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Investment Objectives

The Southern Charter BCI Defensive Fund of Funds is a cautious managed fund of funds. The primary investment objective of the portfolio is to provide the investor with a high level of income and stable capital growth. The Fund aims to provide investors with capital growth of 3% above inflation over a rolling two year period by investing in a combination of asset classes including local and international equities, fixed interest, property and cash. The Fund looks to provide capital stability and is ideal for investors with a shorter investment horizon, who seek capital growth and who are within 5 years of retirement. The fund is Regulation 28 compliant.


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 range from 0% to 40%, depending on economic conditions with a neutral weighting of 20%. 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 Defensive FoF'sCumulative-0.5%19.4%55.5%122.6%
CPI +3%Cumulative8.5%27.7%52.4%115.5%
SC Defensive FoF'sAnnualised-0.5%6.1%9.2%9.3%
CPI +3%Annualised8.5%8.5%8.8%8.9%

Fund Commentary

South Africa has entered a technical recession as the economy has recorded two consecutive quarters of contracting GDP growth, -0.7% for 1Q 2017 and -0.3% in 4Q 2016. SA equity returns were dented by foreign outflows, a robust rand, and weakness in commodity prices. Concerns over the Chinese economy, a withdrawal of speculative demand, and strong supply growth have all weighed on commodity prices. Conversely, foreign investor appetite for certain emerging market debt, including relatively attractive SA government bond yields, supported continued strong inflows into the local bond market, totalling approximately R45 bn to the end of May 2017.

The strongest investment performance in May came from bonds, with the All Bond Index returning 1.0%, while cash delivered 0.6%. The All Share Index returned -0.4% for the month, mainly due to resources (-3.5%) and financial (-1.4%) stocks. Listed Property churned out a meagre 0.1% return and Global Equities performed well (MSCI World +0.6% in rands) amidst a strengthening rand of 2.2% vs the US dollar.

The latest SA inflation data also improved more than expected, as CPI fell to 5.3% y/y from 6.6% y/y. At the same time, the SARB kept interest rates unchanged at its Monetary Policy Meeting in May, which came as no surprise, justified by further possible credit rating downgrades and a deteriorating growth outlook.

Asset Allocation - Values displayed in percentage (%)

Int Fixed Income13.0%4.6%
Int Equity7.0%17.9%
Int Property0.0%4.0%
Local Equity28.0%20.7%

Asset Class Performance - Values displayed in percentage (%)

1 YearMonthly
Global Bonds-16.7%0.3%
MSCI World-1.8%0.7%
Global Property-15.4%1.0%
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Time horizon

Less than 5 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