The Investec Retirement High Equity Portfolio with Offshore is a unit trust that aims to provide long-term capital and income growth. The fund operates in South African Rand.

To participate in the Investec Retirement High Equity Portfolio, including Offshore, a minimum investment of R3 million is required. With a total investment of R1.30 billion, this fund is one of the largest unit trusts offered by Investec in terms of size.

As the fund is professionally managed, there is an associated annual management fee. The management fee for the fund is 1.25% per year, with a minimum fee of R12,500.00.

The Investec Retirement High Equity Portfolio was established on January 1, 2008. Since its inception, the fund has benchmarked against the South Africa Multi-Asset High Equity (ASISA) and consistently outperformed it.

This fund adheres to Regulation 28, allowing it to invest up to 75% of its assets in equities. It is suitable for pension investments, provident fund investments, preservation purposes, and other investments.

Investec Wealth and Investment International serve as the portfolio managers for the fund, responsible for its investment activities and allocation of funds to specified assets.

When considering investing in this fund, it is important to evaluate its performance and the assets it holds. First, we assess the fund’s performance, followed by a review of the fund’s assets.

Investec Retirement High Equity Portfolio including Offshore Performance

Compared to its peers, the Investec Retirement High Equity Portfolio including Offshore demonstrates strong performance. Since its inception, the fund has grown by over 300%. However, it should be noted that this high return comes with moderate to high risk classification for the fund.

Since inception, the fund has achieved a growth rate of 8.20%, surpassing both South African inflation and the set benchmark. The benchmark, on average, has grown by 7.50% per year, which is 0.70% lower than the fund’s average.

Despite outperforming its benchmark, the fund closely tracks it and follows a similar trend line. As a result, there may be instances where the fund lags behind the benchmark.

Over the past ten years, there has been a slight underperformance by the fund compared to its benchmark. While the fund grew at an annual rate of 7.2%, the benchmark grew at a rate of 7.5%, resulting in the benchmark outperforming the fund by 0.30%.

In the short term, the fund and the benchmark may exhibit significant performance overlap. For example, from October 1, 2022, to December 31, 2022, the fund experienced an average annual growth of 8.9%, while the benchmark had an average annual growth of 6.9%, indicating a 2% higher performance for the fund.

Throughout its history, the fund has consistently outperformed the South African inflation rate. Despite the current inflation rate being at 7.1%, the highest in over a decade, the fund has achieved a year-to-date increase of 8.9%.

To gain a comprehensive understanding of the fund, it is essential to delve further into the specific assets held in the Investec Retirement High Equity Portfolio, including Offshore. Details regarding the fund’s investments are discussed in the following section.

Bonds represent the fund’s second most significant investment. These bonds include both local and offshore bonds, with a majority issued by governments. Bonds make up over 15% of the fund’s assets, with local bonds constituting the majority of the bond investments.

Additionally, the fund allocates investments to both local and international real estate, accounting for 5% of its portfolio. Cash holdings also play a significant role, amounting to 4.6% of the total assets.

The table below provides a clear presentation of the fund’s invested assets:

Fund Assets Allocation:

• Investec WA Global Equity
• Investec WA Core
• R2035 Government Bond
• Naspers
• Anglo-American Plc
• FirstRand Ltd.
• BHP Group Ltd.
• R2030 Government Bond
• Standard Bank Group Ltd.
• Shoprite Holdings Ltd.

Advantages of Investec Retirement High Equity Portfolio including Offshore:

• The fund invests in a well-balanced range of assets suitable for retirement investments.
• The fund is managed by a reputable investment manager.
• The fund maintains low equity exposure, reducing volatility in the long run.
• Since its inception, the fund has consistently outperformed its benchmark.

Disadvantages of Investec Retirement High Equity Portfolio including Offshore:

• The minimum required investment is too high for many investors.
• The fund may occasionally yield returns lower than the South African investment rate or earnings from a fixed deposit account.
• There is no capital guarantee provided by the fund.

Conclusion

The Investec Retirement High Equity Portfolio including Offshore is a moderate-risk investment fund that can be subject to volatility at times. While the fund’s value may decrease periodically, it does not necessarily indicate a loss. Investing in this fund has the potential to generate positive returns over time, making it suitable for long-term investment objectives.