FNB Multi Manager Equity Fund review 2024

The FNB Multi Manager Equity Fund is a prominent investment vehicle managed on a multi-manager basis. This fund aims to […]

FNB multi manager equity fund

The FNB Multi Manager Equity Fund is a prominent investment vehicle managed on a multi-manager basis. This fund aims to provide investors with above-average capital growth over the medium to long term primarily through investments in equities. In this article, we delve into the key aspects of this fund, including its investment strategy, performance history, risk profile, fee structure, and more.

Investment Strategy

The fund’s investment strategy revolves around actively managed equity mandates, where skilled managers are selected and combined to optimize alpha generation. The approach includes exposure to foreign investments, which introduces currency risk and potential macroeconomic and political risks.

Performance Overview

Historical Performance

The historical performance of the FNB Multi Manager Equity Fund offers insights into its track record over different timeframes. Table 1 presents the cumulative returns of the fund over the past decade, highlighting both positive and challenging periods.

Table 1: FNB Multi Manager Equity Fund Cumulative Returns (10 Years)

TimeframeFund Return (%)Benchmark Return (%)
1 Year-2.32-1.76
3 Years7.777.93
5 Years9.649.57
10 Years7.168.06

Analyzing these returns provides investors with an overview of the fund’s performance relative to its benchmark, showcasing its ability to generate alpha over certain periods.

Risk Profile and Metrics

Understanding the risk profile of the FNB Multi Manager Equity Fund is crucial for investors assessing its performance. Table 2 outlines key risk metrics and ratios for the fund, including standard deviation, Sharpe ratio, max drawdown, and highest/lowest 12-month returns.

Table 2: FNB Multi Manager Equity Fund Risk Metrics and Ratios

MetricFund ValueBenchmark Value
Standard Deviation13.17%14.28%
Sharpe Ratio0.080.14
Max Drawdown-24.37%-21.72%
Highest 12-Month122%130.22%
Lowest 12-Month-66.26%-61.8%

These metrics offer a glimpse into the fund’s risk-adjusted performance, volatility, and resilience during market fluctuations.

Comparison with Benchmark

Comparing the FNB Multi Manager Equity Fund’s performance with its benchmark, such as the FTSE/JSE All Share Index or FTSE/JSE Capped SWIX, provides a benchmark for evaluating its relative success. Table 3 illustrates the fund’s performance against its benchmark over various timeframes.

Table 3: FNB Multi Manager Equity Fund vs Benchmark Performance

TimeframeFund Return (%)Benchmark Return (%)Tracking Error
1 Year-2.32-1.760.56%
3 Years7.777.93-0.16%
5 Years9.649.570.07%
10 Years7.168.06-0.9%

Analyzing the tracking error alongside returns provides insights into how closely the fund mirrors or deviates from its benchmark, indicating its ability to add value through active management.

Volatility and Drawdown Analysis

Volatility and drawdown analysis are crucial in assessing the fund’s risk exposure and downside protection. Table 4 presents the fund’s volatility measures and drawdown compared to its benchmark.

Table 4: Volatility and Drawdown Analysis

MetricFund ValueBenchmark Value
Standard Deviation13.17%14.28%
Max Drawdown-24.37%-21.72%

Lower standard deviation suggests lower volatility, while a higher drawdown indicates greater downside risk. Understanding these metrics helps investors gauge the fund’s risk-return profile.

Risk Profile and Investment Objectives

Understanding the fund’s risk profile is vital for investors. The FNB Multi Manager Equity Fund has an aggressive risk profile, leading to potential volatility in capital values over the short term. The fund’s investment objective is to achieve above-average capital growth over the medium to long term by primarily investing in equities.

Fee Structure and Total Investment Charges

Investors must be aware of the fees associated with the fund. The fee structure includes an annual management fee, total expense ratio (TER), and transaction costs. A breakdown of these costs over different periods provides transparency to investors.

Manager Allocation

Diversification across managers is a key feature of this fund. The allocation percentage to different managers, such as Truffle Asset Management, Ninety One, Coronation Fund Managers, Aylett & Co, Fairtree, Ashburton Fund Managers, and Abax Investments, gives insight into the fund’s strategy of combining expertise from various sources.

ManagerAllocation (%)
Truffle Asset Management20.69
Ninety One15.12
Coronation Fund Managers14.80
Aylett & Co14.60
Fairtree14.51
Ashburton Fund Managers10.59
Abax Investments9.48

Past Performance and Future Expectation

Understanding Past Performance

Past performance refers to how an investment or fund has performed over a specified period, typically measured in months or years. For the FNB Multi Manager Equity Fund, a decade-long performance history provides valuable insights into its track record. From 2012 to 2022, the fund demonstrated varying returns, with notable peaks and troughs. Table 1 below showcases the annual returns of the fund during this period.

Table 1: FNB Multi Manager Equity Fund Annual Returns (2012-2022)

YearReturn (%)
201222.66
201322.91
201412.31
20153.05
20164.47
20179.85
2018-8.35
201910.96
20208.11
202129.21
20224.69

Analyzing these annual returns provides a glimpse into the fund’s performance under various market conditions, showcasing both positive and negative years.

Limitations of Past Performance

While past performance offers valuable data, it comes with inherent limitations. One major caveat is the inability to predict future market movements solely based on historical data. Economic conditions, geopolitical events, and market sentiment can drastically shift, impacting investment outcomes.

Moreover, past performance does not account for changes in fund management, investment strategies, or market dynamics. For instance, the FNB Multi Manager Equity Fund underwent manager allocation changes over time, as shown in Table 2.

Table 2: FNB Multi Manager Equity Fund Manager Allocation Changes

QuarterTruffle Asset (%)Ninety One (%)Fairtree (%)Aylett & Co (%)Coronation (%)Ashburton (%)Abax Investments (%)
31 Dec 202320.8515.4214.8914.2714.2510.889.25
30 Sep 202320.6015.4915.0714.4214.0110.599.69

Changes in manager allocations can impact fund performance and risk profiles, highlighting the dynamic nature of investment management.

Future Expectations and Strategy

While past performance informs, it does not dictate future outcomes. Investors must consider a fund’s investment strategy, risk profile, and market outlook when forming future expectations. The FNB Multi Manager Equity Fund’s objective of above-average capital growth and aggressive risk profile necessitates a proactive approach.

The fund’s investment strategy, based on multi-manager principles, aims to leverage the expertise of various fund managers. This strategy seeks to optimize alpha generation by combining top-performing managers while actively managing exposures and diversifying across regions.

Furthermore, the fund’s exposure to foreign investments introduces currency risk and macroeconomic considerations. Monitoring global trends, geopolitical developments, and economic indicators becomes imperative in shaping future expectations.

Performance Metrics and Ratios

To gauge future performance potential, investors often rely on performance metrics and ratios. The FNB Multi Manager Equity Fund’s statistics provide valuable insights:

  • Standard Deviation: Measures volatility; lower deviation indicates lower risk.
  • Sharpe Ratio: Assesses risk-adjusted returns; higher ratios indicate better risk-adjusted performance.
  • Max Drawdown: Indicates the maximum loss experienced by the fund; lower drawdowns signify better resilience.
  • Highest and Lowest 12-Month Returns: Showcase extremes in performance over specific periods.

Table 3 illustrates these performance metrics for the fund compared to its benchmark.

Table 3: FNB Multi Manager Equity Fund Performance Metrics

MetricFund ValueBenchmark Value
Standard Deviation13.17%14.28%
Sharpe Ratio0.080.14
Max Drawdown-24.37%-21.72%
Highest 12-Month122%130.22%
Lowest 12-Month-66.26%-61.8%

Conclusion

The FNB Multi Manager Equity Fund offers investors an opportunity to access actively managed equity mandates with an aggressive risk profile. By carefully considering the fund’s investment strategy, performance history, risk profile, fee structure, and manager allocation, investors can make informed decisions aligned with their financial goals and risk tolerance. However, it is crucial to note that all investments carry inherent risks, and thorough due diligence is recommended before making any investment decisions.


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