Smaller Fund Range for the first time while maintaining their status as Best Moderate Allocation Fund (NFB Ci Managed Fund). This comes after successfully defending their three-time title for Best South African Multi-Asset Low Equity Fund (NFB Ci Stable Fund) at the Raging Bull Awards last month.
The annual Morningstar Awards recognise funds and fund houses that added the most value for investors in 2018 and over longer time periods. Finalists are selected using a quantitative methodology with a qualitative overlay that considers the one-, three-, and five-year performance history.
According to Paul Marais, Managing Director and Portfolio Manager of NFB Asset Management, the fund’s investment philosophy is based on three key beliefs: that asset allocation drives a significant proportion of overall investment returns; that markets are inefficient and swing between periods of over- and under-valuation; and that NFB can exploit these circumstances to the benefit of investors.
“Investors in the NFB Ci Managed Fund will have benefited from significant exposure to funds such as the Coronation Strategic Income Fund and the Investec Diversified Income Fund which returned 7.8% and 9.5%, respectively, for 2018 and 8.5% and 8.3%, respectively, per annum for the last five years,” says Marais.
Investors would also have gained from exposure to the Prescient Income Provider Fund, which was present in the managed fund almost throughout the review period; only being replaced by the SIM (Sanlam Investment Management) Active Income Fund right at the end of 2018.
“All of these are low-heartbeat funds that would have contributed handsomely to the Managed Fund’s low risk-adjusted return profile.”
Marais says that lower-than-peer average exposure to the South African equity market and foreign currencies further contributed to the Managed Fund’s performance. It will also have benefited from tactical trading opportunities which were successfully executed, including reducing offshore exposure when the rand went through R15 to the US dollar and increasing local equity exposure when the JSE All Share Index fell to 50,000 points.
While NFB Asset Management does not believe in forecasting, Marais says the NFB Ci Managed Fund’s yield of about 5% should help to protect it from further downturns in the South African equity and property markets and from a significant strengthening in the rand.
About NFB Asset Management
Launched in 2001, NFB Asset Management is one of South Africa’s leading independent providers of local and offshore single manager and multi-manager funds.
NFB Asset Management is at the forefront of the discerning investor landscape. Each investment decision we make is guided by intellectual insight, considered research and rigorous due diligence processes. Championed by a group of savvy financial professionals, we aim to help generate and preserve wealth to create long-term investment success using current market opportunities.
With NFB Asset Management, investors benefit from extensive resources, expertise and experience across the wider NVest Financial Holdings Group.