Category Investments

RECM Global Equity Fund receives FSB approval

20 May 2014 Jan van Niekerk, RECM

Cape Town based global value manager RECM announced today that its recently launched Global Equity Fund received approval from the Financial Services Board (FSB). This allows the Fund to be marketed as a Foreign Collective Investment Scheme in South Africa. South African investors can now access a dollar-based portfolio of undervalued global equities, selected by RECM.

The RECM Global Equity Fund is a Guernsey-domiciled, dollar-denominated fund that invests exclusively in global equities. "The Fund’s mandate is to be at least 95% invested in equities at all times,” says Jan van Niekerk, Chief Executive Officer of RECM. "There will generally be some cash in the Fund to enable efficient portfolio management, but it is our intention to keep this to a small percentage.”

The Fund is managed according to the value investing approach that RECM is so well known for. "Our value approach reduces risk while maximising investment returns by targeting equities of companies selling for well below their intrinsic value. It could test your nerve, as we often end up investing in unpopular stocks and sectors. But our experience in managing money in this way means that we are very comfortable with our approach - we always follow our convictions.”

RECM’s approach has led to the Global Equity Fund’s sister fund – the RECM Global Fund – substantially outperforming its benchmark since inception in 2006 while also showing significantly lower drawdowns. The Global Fund recently placed 13th out of 1 457 global competitors in its sector over its lifetime in the Morningstar survey.

"We established the Global Equity Fund in January this year as some of the investors in the RECM Global Fund expressed preference for a fully-invested global equity fund,” says van Niekerk. "The Fund’s performance is measured against the MSCI World All Countries TR Index, which we believe is an appropriate comparative given the pure equity focus of the Fund.

"Investors can access the Fund through using their annual foreign investment allowance. We have already started the process of establishing a rand-based feeder fund to accommodate those investors that cannot externalise their capital and can only invest in a South African unit trust.”

"We believe that anyone looking for a global portfolio of equities selected in a disciplined value investment approach should find the new fund very attractive,” concludes van Niekerk.

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