While taking a multi-asset approach is likely nothing new for the more astute South African investor, local access to quality offshore multi-asset funds is typically quite limited. This all changed with an announcement that global asset management firm, Schroders, has launched an FSCA-approved international fund designed specifically for South African investors who would like to access a flexible multi-asset portfolio.
According to Schroders Multi-Asset Fund and Product Manager, Tim Carr, the new International Selection Fund (ISF) Global Managed Growth fund is offering local clients strong diversification benefits at a time when they need it most. “Given South Africa’s low-growth economic environment, this fund seeks to deliver long-term capital growth over five to seven years by investing in a diversified global portfolio of equities, fixed income and alternative assets.
“This means South African investors will benefit from geographical diversification and a smoother return path driven by a dynamic asset allocation – an approach that focuses on actively managing the portfolio through these unprecedented COVID-19 times, with the ability to change, sometimes drastically, how the fund is positioned depending on current market movements.”
Importantly, the ISF Global Managed Growth fund has the freedom to invest wherever the most attractive risk-adjusted opportunities are to be found, states Carr. “Every asset class therefore has to earn its position in the portfolio by either enhancing return or reducing risk. The strategy has a growth bias and we would expect it to perform well in an environment which is strong for growth assets as a whole.”
While the risk profile is relatively high, given this growth-seeking objective, Carr says that the Financial Sector Conduct Authority (FSCA) approval is definitely a source of comfort for investors. “The FSCA looks at, amongst other things, the investment policy of the fund, the entity managing the fund and the regulatory environment of the jurisdiction in which the foreign collective investment scheme is registered to assess whether the fund should be approved.”
Kondi Nkosi, South Africa Country Head at Schroders says the launch of this latest fund cements Schroder’s reputation of providing relevant and valuable offshore opportunities to the local market. Investors have increasingly been allocating their savings to multi-asset solutions and this is now an area where their extensive experience can benefit the local market.
“Flexibility is the critical success factor of the fund’s strategy and we can demonstrate our superior resources to be able to effectively implement this dynamic approach and deliver international returns for our local clients,” says Nkosi. Schroders now have a total of 12 funds approved for distribution by the FSCA.
“Schroders have been managing multi-asset mandates since 1947 using a qualitative and quantitative research-led process, proprietary portfolio construction and risk management systems. As one of the few global managers operating in South Africa, we are thrilled to be able to continue delivering leading offshore strategies to the local market during these uncertain times,” Carr concludes.