In the realm of global investments, the Coronation Global Managed [ZAR] Feeder Fund stands out as a beacon for investors seeking diversified exposure and long-term growth potential. This article delves into the fund’s objective, investment strategy, performance, and suitability for investors.
Objective and Investment Strategy
The Coronation Global Managed [ZAR] Feeder Fund’s objective is to strike a balance between long-term real returns and the risk of loss. This objective is achieved through a meticulously crafted investment strategy that encompasses several key elements:
- Diversification: The fund believes in the power of diversification across various asset classes. While it maintains a bias towards shares, it also allocates investments to listed property, bonds, and cash. This diversified approach helps mitigate risks associated with any single asset class’s performance fluctuations.
- Global Exposure: With a mandate to invest globally, the fund taps into opportunities across developed economies like the US, Europe, and Japan, as well as emerging markets. This global exposure allows investors to benefit from diverse economic conditions and market dynamics.
- Valuation-Based Investments: The fund’s investment decisions are grounded in a thorough assessment of asset valuations. It focuses on assets deemed attractively valued, offering the potential for strong long-term growth. This disciplined approach helps identify investment opportunities with favorable risk-return profiles.
- Rigorous Research: The fund’s share selection process is underpinned by rigorous international research conducted by Coronation’s experienced investment team. This research-driven approach aims to identify companies and assets with solid fundamentals, growth potential, and attractive valuations.
- Risk Management: While shares typically offer superior long-term returns, they also come with higher levels of risk and volatility. The fund employs a disciplined risk management approach to mitigate downside risks and navigate market fluctuations effectively. This includes monitoring market trends, assessing macroeconomic factors, and implementing risk-reducing strategies when deemed necessary.
- Currency Exposure: The fund’s exposure extends to various currencies, primarily the US dollar, British pound, euro, and yen. This diversified currency exposure helps manage currency risk and capture potential gains from favorable currency movements.
- Use of Financial Instruments: To implement specific investment views and enhance portfolio efficiency, the fund may utilize exchange-traded funds (ETFs) and other financial instruments such as derivatives. These instruments are employed judiciously to enhance portfolio diversification and optimize returns.
In essence, the Coronation Global Managed [ZAR] Feeder Fund’s investment strategy is designed to capitalize on global investment opportunities while carefully managing risks.
Asset Allocation and Exposure
The fund’s asset allocation is diversified across equities, infrastructure, property, convertible bonds, high-yield bonds, and cash. The table below illustrates the effective asset allocation of the fund as of 31 January 2024:
| Asset Class | Allocation Percentage |
|---|---|
| Equities | 61.4% |
| Infrastructure | 4.9% |
| Property | 1.9% |
| Convertible Bonds | 2.1% |
| High Yield Bonds | 5.4% |
| Gold | 0.0% |
| Merger Arbitrage | 0.0% |
| Fixed Income | 17.5% |
| T-Bills | 7.2% |
| Inflation-linked bonds | 8.3% |
| Investment Grade | 6.8% |
| Cash | 2.0% |
Performance and Risk Statistics
The fund’s performance metrics provide valuable insights into its historical returns and risk profile. The following table compares the fund’s returns against its benchmark (after fees) as of various timeframes:
| Timeframe | Fund Return (%) | Benchmark Return (%) |
|---|---|---|
| Latest 3 Years | 17.1% | 13.2% |
| Latest 1 Year | 1.9% | 0.9% |
| Since Launch | 11.0% | 8.7% |
| Latest 10 Years | 13.5% | 11.6% |
| Latest 5 Years | 8.8% | 6.9% |
The performance and risk statistics of the Coronation Global Managed [ZAR] Feeder Fund provide valuable insights into its historical performance, risk profile, and return potential. Here’s an analysis of the fund’s performance and risk metrics as of the latest available data:
- Historical Returns:
- Latest 3 Years: The fund delivered an annualized return of 17.1% over the past three years, outperforming its benchmark return of 13.2%. This indicates the fund’s ability to generate above-average returns for investors during this period.
- Latest 1 Year: In the most recent year, the fund achieved a return of 1.9%, surpassing the benchmark return of 0.9%. Although the one-year return is relatively modest, it still reflects positive performance compared to the benchmark.
- Long-Term Performance:
- Since Launch: Since its inception, the fund has generated an annualized return of 11.0%, exceeding the benchmark’s return of 8.7%. This long-term performance demonstrates the fund’s ability to deliver consistent returns over extended periods.
- Volatility and Risk:
- Annualized Deviation: The fund’s annualized deviation, a measure of volatility or risk, is reported at 12.5%. This indicates the level of fluctuations in the fund’s returns over time. A lower deviation suggests lower volatility and potentially lower risk.
- Sharpe Ratio: The Sharpe Ratio, which measures the risk-adjusted return, is calculated at 0.44. A higher Sharpe Ratio indicates a better risk-adjusted performance, where the fund has delivered returns in excess of the risk-free rate per unit of risk taken.
- Maximum Gain and Drawdown:
- Maximum Gain: The fund’s maximum gain, representing the highest return achieved within a specific period, is reported at 22.7%. This indicates the fund’s ability to capture significant upside potential during favorable market conditions.
- Maximum Drawdown: On the downside, the fund experienced a maximum drawdown of 15.8%, reflecting the largest decline in value from a previous high. This metric helps assess the fund’s resilience during market downturns.
- Positive Months and Performance Trends:
- Positive Months: The fund has demonstrated positive performance in 59.6% of months, indicating a favorable track record of generating returns over time. This consistent positive performance reflects the fund’s ability to navigate various market conditions.
- Performance Trends: Analyzing performance trends over different timeframes, such as the latest 5 years and 10 years, provides insights into the fund’s ability to deliver sustained returns and adapt to changing market environments.
Overall, the performance and risk statistics showcase the Coronation Global Managed [ZAR] Feeder Fund’s track record of delivering competitive returns while managing risk effectively.
Top 10 Holdings
The fund’s top holdings as of 31 December 2023 reflect a diverse portfolio of global companies across various sectors. Some notable holdings include Entain Plc, Amazon Com Inc, and Airbus Group Se. The table below highlights the top holdings and their percentage of the fund:
| Holding | % of Fund |
|---|---|
| Entain Plc | 2.9% |
| Amazon Com Inc | 2.5% |
| Airbus Group Se | 2.4% |
| Canadian Pacific Railway Ltd | 2.6% |
| Heineken Holdings Nv | 2.4% |
| Canadian National Railway Co | 2.3% |
| Flutter Entertainment Inc | 2.3% |
| Ryanair Holdings Plc Adr Usd | 2.3% |
| Charles Schwab Corp | 2.3% |
| British American Tobacco | 2.3% |
Portfolio Manager Commentary
Neil Padoa, the portfolio manager of the Coronation Global Managed [ZAR] Feeder Fund, provides insightful commentary on the fund’s performance and market dynamics. His commentary offers valuable perspectives on investment decisions, asset allocation, and key contributors to fund returns.
- Market Performance Review:
- Padoa begins by reviewing the market performance during the period under consideration. He highlights notable trends, such as strong returns in global equities and bonds, and discusses key drivers of market movements.
- Asset Allocation Decisions:
- The commentary delves into the fund’s asset allocation decisions during the period. Padoa explains the rationale behind allocating investments across equities, infrastructure, property, bonds, and cash, considering market conditions and potential opportunities.
- Top Contributors to Returns:
- Padoa identifies and discusses the top contributors to the fund’s returns. This may include specific companies or sectors that significantly impacted the fund’s performance during the period.
- Risk Management Strategies:
- The commentary sheds light on risk management strategies employed by the fund. Padoa may discuss how the fund mitigated risks, adjusted positions, or implemented hedging strategies to navigate market uncertainties.
- Performance Attribution:
- Padoa provides a performance attribution analysis, explaining the factors that contributed to the fund’s performance relative to its benchmark. This analysis helps investors understand the drivers of returns and the fund’s ability to add value.
Market Performance and Outlook
In addition to the portfolio manager’s commentary, an overview of market performance and outlook is crucial for investors to assess the broader economic and market conditions. This section may include the following elements:
- Review of Market Trends:
- A review of major market trends during the period, such as economic indicators, geopolitical events, central bank policies, and industry-specific developments.
- Sector and Asset Class Performance:
- Analysis of performance across different sectors and asset classes, highlighting areas of strength and weakness. This information helps investors understand sector rotations and investment opportunities.
- Market Sentiment and Investor Behavior:
- Insights into market sentiment and investor behavior, including risk appetite, market valuations, and investor preferences for certain asset classes or regions.
- Outlook and Expectations:
- Padoa’s commentary on the market outlook, expectations for future performance, potential risks, and opportunities. This section may include forecasts for economic growth, interest rates, inflation, and market volatility.
- Investment Themes and Strategies:
- Discussion of investment themes and strategies that may drive future market performance. This could include themes like technological innovation, sustainable investing, global trade dynamics, and sector-specific trends.
By combining the portfolio manager’s commentary with an overview of market performance and outlook, investors gain a comprehensive understanding of the fund’s performance drivers, risk management approach, and the broader market context.
Conclusion
The Coronation Global Managed [ZAR] Feeder Fund offers investors a well-diversified approach to international investing. With a focus on long-term growth and risk management, the fund has delivered competitive returns compared to its benchmark. Investors looking for exposure to global markets and a balanced investment strategy may find this fund suitable for their portfolios. It’s important for investors to conduct thorough due diligence and consult with financial advisors before making investment decisions.
