Category Investments

Launch of two ‘new’ unit trusts

19 May 2009 EFS Investment Solutions

With tentative green shoots appearing in the global economy and the Johannesburg Securities Exchange on the brink of the 22 000 mark, now may be the right time to invest in two new funds with a long term track record of capital preservation.

The Intervest Flexible Fund of Funds and the Intervest Prudential Fund of Funds have been managed as ‘wrap’ funds by Equinox since their launch and have recently been converted to Financial Service Board registered collective investment schemes.

‘Although our primary offering as a financial services company has been our collective investment trading platform, many of our clients demanded access to risk related investments that had an absolute return focus. Three years ago there were not that many collective investments with this investment focus. We managed the funds for our clients in a wrap fund format because our systems could easily deal with the complexity of bulk switching of funds.

‘As time went on, we realized that our performances were commendable and deserved to have a higher profile,’ said Cathy van der Merwe, Chief Operating Officer and Director of EFS Investment Solutions. ‘Unfortunately, due to the structural difference between wrap funds and registered collective investments, we cannot attribute past performance to the new funds.’

‘For the three year period ending April 1st 2009, the Intervest Flexible Fund of Funds and the Intervest Prudential Fund of Funds would have been ranked in the top five funds over three years in the Asset Allocation Flexible and Asset Allocation Prudential Variable Equity sectors respectively,’ she said.

‘We are delighted that our fund manager of the Equinox Managed Portfolios, Barry Shamley, who will continue as the designated manager of the Intervest Collective Investment Fund of Funds, was able to position the funds in anticipation of the equity falls at the end of 2008. He has been ably assisted in these asset allocation calls by the Chief Investment Officer of Oryx Investment Managers, Heiko van Wyngaarden,’ she said.

The benchmarks of the funds are the SARB Repo Rate + 3.5% for the Intervest Flexible Fund of Funds and SARB Repo Rate + 2.5% for the Intervest Prudential Fund of Funds.

Looking at the investing environment, fund manager Barry Shamley said that the uncertainty favoured collective investments that were mandated to invest across different asset types.

‘Increasingly, analyst opinion is asserting that the end of the global recession is nigh, and that that we are in the early stages of a new longer-term bull market. Our view is that economic fundamentals point to a period of depressed global growth that could last some years. This notwithstanding, history has shown that even in a secular market downtrend we can see significant market rallies that can last quite some time.

‘We believe that the current market rally may be followed by equity markets pulling back quite sharply before there is a genuine resumption of an upward trend. This may even happen a few times, as evinced by Japanese markets over the last 20 years,’ said Shamley.

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