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FNB multi manager balanced fund review 2024 | Rateweb
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FNB multi manager balanced fund review 2024

In the realm of investment opportunities, the FNB Multi Manager Balanced Fund stands out as a compelling option for investors seeking inflation-beating capital growth over the medium to long term. Managed on a multi-manager basis, this fund embodies a strategic philosophy aimed at optimizing alpha generation through the selection and combination of top-tier managers, coupled with an active management approach.

Investment Strategy: A Multi-Asset Mandate Approach

The core of the FNB Multi Manager Balanced Fund’s strategy lies in its exposure to actively managed multi-asset mandates. By diversifying across a range of asset classes in a balanced manner, the fund navigates through market dynamics with agility. However, it’s important to note that this strategy also exposes the fund to currency risk and potential macroeconomic and political risks inherent in investments across diverse regions.

Investment Objectives: Targeting Inflation-Beating Growth

The primary goal of the FNB Multi Manager Balanced Fund is to provide investors with inflation-beating capital growth. This objective is pursued through a meticulous allocation of resources across various asset classes, harnessing the expertise of top-notch managers to capitalize on market opportunities.

Risk Profile and Benchmarking: Navigating Market Dynamics

As per the ASISA classification, the fund falls into the South African Multi Asset – High Equity category, signaling a moderate to high-risk profile. Its benchmark, CPI + 5% over rolling 5-7 year periods, sets a performance standard that aligns with its growth-oriented objectives.

Fund Performance Overview:

Time PeriodFund Return (%)Benchmark Return (%)
YTD-0.230.90
1 Month0.360.49
3 Months1.421.23
6 Months1.854.23
1 Year2.1110.33
3 Years8.0110.98
5 Years8.7510.11
10 Years7.6310.12

The fund’s performance, especially over longer periods, showcases its ability to deliver competitive returns compared to its benchmark.

Fee Structure: Transparency and Cost Considerations

The FNB Multi Manager Balanced Fund maintains a transparent fee structure, with an Annual Management Fee TER of 1.39% for 1 year and 1.52% for 3 years, inclusive of all costs. Additionally, transaction costs are kept at 0.42% for 1 year and 0.48% for 3 years, ensuring investors have a clear understanding of the total investment charges.

Manager Allocation and Performance Metrics: Analyzing Fund Composition

The fund’s allocation among various managers provides insight into its diversification strategy:

  • Ashburton Fund Managers: 36.23%
  • Truffle Asset Management: 24.53%
  • Obsidian Capital: 18.35%
  • Abax Investments: 17.98%
  • Coronation Fund Managers: 2.55%

Performance Metrics:

  • Standard Deviation: 8.6%
  • Sortino Ratio: 0.25
  • Sharpe Ratio: 0.17
  • Max Drawdown: -15.32%
  • Highest 12-Month Return: 36.23%
  • Lowest 12-Month Return: -10.64%

These metrics reflect the fund’s risk-adjusted performance, providing a holistic view of its stability and return potential.

Historical Performance and Distribution History:

The fund’s historical performance, though not indicative of future results, underscores its consistency and resilience over various market cycles. Income distributions have also been steady, contributing to overall investor returns.

Advantages of the FNB multi-manager balanced fund 

  • The minimum monthly payment is low.
  • Contributions to the fund can be made in a variety of ways.
  • A multi-manager balanced fund accepts investments of almost any kind because it complies with Regulation 28.
  • Depending on the investment instrument chosen, the fund’s earnings may not be taxed. For instance, living annuity earnings are tax-free.
  • Anyone may invest in the multi-manager balanced fund, even those under the age of 18.
  • Since the fund is multi-managed, each managing firm can concentrate on playing its own part in fund growth.

Disadvantages of the FNB multi-manager balanced fund

  • Capital that is invested in the fund is not guaranteed and can be lost to a certain degree. 
  • The fund cannot reliably predict the amount of interest that each unit can earn over time. 

Conclusion

The FNB Multi Manager Balanced Fund offers investors a well-rounded investment proposition characterized by strategic multi-manager allocation, competitive performance, transparent fee structures, and a commitment to inflation-beating growth. While past performance is a guide, investors should conduct thorough due diligence and seek independent advice before making investment decisions.