The FNB Core Balanced Fund is a unit trust that aims to beat inflation while creating capital growth. The product is available for purchase by anyone who wants to invest for the long or short term. People looking for rapid growth, on the other hand, should look for alternate unit trust investment opportunities offered by FNB because the fund’s development is slow.
The fund can be used to make investments in one’s future, whether for a specified purpose or unanticipated needs. It favours a mixture of investments and can be utilized for endowments, tax-free savings, retirement annuity investments, and more. Restrictions can be imposed depending on the type of investments or savings you want to make with the fund.
The FNB Core Balanced Fund holds both local and foreign bonds and invests in a variety of countries. The fund invests in real estate both domestically and abroad. Additionally, the fund invests a large portion of its funds in domestic companies.
The type of investment one chooses while investing in the FNB Core Balanced Fund could have tax benefits. For instance, if one chooses to invest in a living annuity, tax deductions are available for retirement annuity contributions and the investment returns are tax-free.
You may learn more about the FNB Core Balanced Fund by reading the comprehensive overview of the unit trust below. This includes the fees levied, the fund’s make-up, and its operation.
FNB Core Balanced Fund summary
The FNB Core Balanced Fund unit trust invests in a range of assets and it was established on September 8, 2021, and it has 103.85 million in capital. The FNB Core Balanced Fund’s benchmark is the CPI + 5%, rolling over a 7-year period. The fund charges an annual management fee of 0.30 %.
The FNB Core Balanced Fund has managed to grow by 9.05% on average since inception and has fallen short of its desired benchmark of which grew by an average of 11.66%. Currently, the FNB has issued 95 697 272 units. R1.04 is the unit cost.
The unit trust has investments in both domestic and foreign assets. The following are the assets that the fund is made up of:
- Local equity making 41.06%,
- Local cash equating to 10.15% of the fund,
- Offshore equity equalling 4.26% of the fund,
- Local bonds equalling 14.14% of the fund,
- Offshore cash equalling 6.03% of the fund,
- Local property equalling 1.91% of the fund,
- Offshore bonds equalling 4.48% of the fund, and
- Offshore property equalling 0.40% of the fund.
The FNB Core Fund invests substantially in the local economy, and its profits are mainly dependent on regional trade. Some of the top companies in South Africa are invested in the FNB Core Balanced Fund. The following is a list of the top companies in which the FNB Core Balanced Fund has invested, along with a breakdown of the holdings percentage:
| Companies | Portfolio % |
|---|---|
| FirstRand Ltd | 1.97% |
| Naspers | 3.56% |
| MTN Group | 1.63% |
| COM FINANCE RICHMONT SA | 4.26% |
| Prosus | 1.45% |
| Anglo-American Plc | 3.45% |
Investment into the FNB Core Balanced Fund comes with costs. The fees that are applicable to the FNB Core Balanced Fund are listed below.
FNB Core Balanced Fund fees 2023
| # | Fee Description | % |
|---|---|---|
| 1 | Asset management fee | 0.30% |
| 2 | Total expense ratio to fund | 0.30% |
| 3 | Transaction costs | 0.09% |
| 4 | Total investment charges | 0.39% |
| 5 | Initial exit and switching fees | 0.00% |
| 6 | Fee structure | A class |
How the FNB Core Balanced Fund works
Before using the FNB Core Balanced Fund, one must choose an investment vehicle. The following are some of the investments permissible in the FNB Core Balanced Fund:
- FNB tax-free savings,
- investment account,
- FNB Endowment fund,
- FNB retirement annuity,
- Pension and provident preservation fund, and
- FNB lifetime income plan
To access the FNB Core Balanced Fund, you must choose one of the several investment alternatives. However, if you choose an investing vehicle, the money you want to invest can be diversified. As a result, a portion will go to the FNB Core Balanced Fund, and the rest will be split among other investment funds.
The money designated for the FNB Core Balanced Fund will be divided among the funds after a choice of investment vehicle has been made. Depending on the type of investment made, the funds will be traded by acquiring units equivalent to the invested amount. The customer has the choice to transfer money from the FNB Core Balanced Fund to other funds the bank provides.
The money invested will earn income based on the performance of the fund. Earnings from the fund can then be withdrawn from the investment account used. Some withdrawals come with tax benefits and can be totally tax-free. Proceeds can only be withdrawn at retirement if a retirement annuity is chosen.
Advantages of the FNB Core Balanced Fund
- The fund invests in diverse assets to mitigate the risks involved with investing.
- The price per unit is low and trades just above R1.00.
- The FNB Core Balanced Fund is open to all investors.
- Depending on the investment vehicle used, income from the fund may not be taxed.
- Investors can anticipate substantial returns on investment if the benchmark target is attained because the benchmark has been set at a reasonable level.
Disadvantages of the FNB Core Balanced fund
- The fund has yet to demonstrate that it can outperform its chosen benchmark because it is still new.
- When compared to award-winning funds, the total amount in the fund is small, yet it offers modest returns. Due to the lack of idle capital, smaller funds are known to offer better returns.
Conclusion
The expertly managed FNB Core Balanced Fund has generated appealing returns since its inception. The fund has a bright future given the investments it has made. Furthermore, the fund’s selected management company (FNB CIS Manco) has on occasion produced outstanding outcomes in its own right making the fund a worthy contender for high future earnings.