Flexible Income Fund boasts best in category returns since inception

Fairtree’s Flexible Income Fund celebrated its ‘5th birthday’ by remaining best-in-category since inception. The fund also recently surpassed the R500m level in terms of assets under management and forms an integral part of the >R5bn in assets managed by the Fixed Income Team at Fairtree Capital.

The Fairtree Flexible Income Plus Prescient Fund, managed by Paul Crawford and Louis Antelme,  offers superior risk-adjusted returns and low correlation to traditional asset classes, as well as the fund peer group, and provides important portfolio construction benefits when using the fund in a well-diversified income portfolio. 

The fund invests in the corporate bond market and follows a credit mandate – making it a very useful diversifier alongside traditional income funds. The fund has been used extensively to meet the post-retirement income needs of clients (living annuity products) and has successfully produced inflation-beating returns – enabling clients to achieve required income outcomes. 

According to Fund Manager Paul Crawford, investing is not exclusively an art or a science but should rather be approached as an engineering problem, resulting in a solution which should achieve a specific investment outcome. “This is one of the fundamental reasons behind the intellectual depth of our Newlands-based, Fairtree Fixed Income Team that incorporates specialised quantitative and mathematical skills that complement an engineering, solution-based focus,” said Crawford.

“To reach a five-year track record is a milestone for investment management teams, but to do so with outstanding top performance in its respective income fund category is a remarkable achievement,” said Bradley Anthony, Chief Investment Officer at Fairtree. 

The team aims to consistently deliver the STEFI +3% (after fees) target return of the Fund by way of careful risk management and broad diversification. The fund invests in a broad range of instruments – more than 120 – and does so in order to provide a ‘diversified first line of defence’ against possible credit defaults. Instruments are carefully assessed by the team prior to being included in a broad-based, credit portfolio. 

Obtaining desired return outcomes and putting ‘runs on the board’ are core to the philosophy and process implemented in managing the Fund and the broad range of instruments from the investable universe ensures a superior risk-adjusted return over time.  

Source: Morningstar

The Fairtree Flexible Income Plus Prescient Fund forms part of the ASISA SA Multi-Asset Income Category 

The Fund is a largely domestic, high yield, fixed income portfolio which aims to return STeFI +3% after fees through the interest rate cycle. The portfolio is suited to investors seeking the highest possible income yield with the tolerance for some capital volatility in the case of credit defaults. 

The portfolio is positioned as a multi-asset income portfolio to reflect the portfolio's flexible mandate in terms of accessing a broad spectrum of underlying high yielding assets including property and securities linked to equities with due consideration being given to the lower risk mandate for the portfolio, using appropriate strategies to minimize risk where necessary.