New Road BCI Stable Fund of Funds

The New Road BCI Stable FoF aims to provide a more cautious investor with a well-diversified, multi-asset investment with a focus on capital stability. This is achieved by limiting drawdowns during times of market volatility and providing a return through a combination of predominantly income and, to a lesser extent, capital growth.

This fund falls within the following ASISA Category:

SA Multi-Asset Low Equity

Objective

The fund aims to achieve the following objectives:

Benchmark: ASISA SA Multi-Asset Low Equity category average
Target Return: South African Inflation (CPI) + 3% over a rolling 3-year term

Strategy

The strategies we employ to achieve the above objectives are:

Limit the fund’s total equity exposure to a maximum of 40% of the portfolio’s net asset value, with listed property (limited to 25%) and income instruments comprising the balance.
(The income component is used to achieve a more stable return profile, because of the yield opportunities on the investments, while the equity component is used to achieve longer-term capital growth and dividends.)
Maintain exposure to both local and offshore instruments, with global allocation forming a maximum of 30% of the portfolio’s net asset value.
(We use our foreign investment allowance to obtain global exposure.)
Apply a building block approach to asset allocation to maintain strict control of the asset exposures.
Construct the local and offshore equity components of the fund by using a core-satellite approach, whereby low-cost passive solutions are used to gain broad market exposure and well-priced actively managed solutions are used to gain exposure to specific strategies, styles, and risk management methodologies.
Use predominantly active solutions to construct the income components of the fund.
Ensure that the fund complies with Regulation 28.