The year 2023 has been a period of reflection for Coronation Fund Managers as we celebrate our 30th anniversary. Over time, we have actively grown the long-term savings of millions of South Africans thanks to an unwavering commitment to a single investment philosophy and purpose.
Since 1993, the critical tenets of our investment philosophy remained that of investing with a long-time horizon and a focus on valuation when selecting instruments or making asset allocation decisions. This enabled us to benefit from the increasingly shorter time horizons that we see play out in market prices and to implement portfolio-defining investment ideas with courage and conviction.
The combination of these factors has resulted in a track record that, we believe, speaks for itself.
But it’s not just about a sound investment philosophy
A sound investment philosophy alone cannot drive a successful investment track record. Executing it requires a well-resourced, experienced and passionate group of people.
A sound investment philosophy alone cannot drive a successful investment track record
Over the past three decades, we have focused on developing and investing in a global investment team of 55 professionals. Today, this team applies our tried and tested investment philosophy across all our portfolios in a collaborative and integrated manner, allowing us to pick the best investment ideas to be represented in our investment portfolios, regardless of asset class or region.
People and philosophy also require a process
We believe that the core strength of an investment process is when it enables the philosophy, the people and the investment work produced (the research, modelling, and constant interrogation of conclusions reached) to seamlessly come together when the big calls need to be made.
Thinking slow, acting fast
This core strength was best demonstrated during five key market moments that presented severe dislocations but also created the most attractive investment opportunities over our three-decade track record. (See table and graph on the right.)
If we pause at each of the significant crises illustrated, our portfolio actions at the time were not informed by the prevailing market sentiment but instead by our long-term work (the ability to think slowly) that gave us the conviction to take advantage of the disconnect between price and value during those critical moments on behalf of our investors (by implementing quickly).
When preparation meets opportunity
When reflecting on why our positioning in these examples worked in our clients’ favour, the answer comes down to a tried and trusted investment philosophy that has been applied consistently over many years. Coupled with a deep and experienced team doing detailed proprietary work as the backbone of the process, it gave us the comfort to act with conviction when the best investment opportunities became available.
Sticking to what works
As simple and obvious as our actions may look with the benefit of hindsight, the reality at the time was that we first had to endure painful periods of short-term underperformance while being as affected as everyone else by the prevailing news flow and headlines.
However, a solid philosophy and trusted process, executed by an experienced team, enabled us to look beyond those moments of market panic and uncertainty. Having stuck with these principles over three decades stood us in good stead and we believe they will continue to contribute to us replicating our track record into the future.
Coronation is an authorised financial services provider.
Coronation Balanced Plus is the retail equivalent of the institutional Coronation Global Houseview Strategy illustrated in the visual. Coronation Balanced Plus was launched in April 1996. The Balanced Plus Fund should be considered a medium- to long-term investment. The value of units may go down as well as up, and therefore Coronation does not make any guarantees with respect to the protection of capital or returns. Past performance is not necessarily an indication of future performance. Unit trusts are traded at ruling prices and can engage in borrowing and scrip lending. The fund is mandated to invest up to 45% of its portfolio into foreign securities and may as a result be exposed to macroeconomic, settlement, political, tax, reporting or illiquidity risk factors that may be different to similar investments in the South African markets. Fluctuations or movements in exchange rates may cause the value of underlying investments to go up or down. Coronation Management Company (RF) (Pty) Ltd is a Collective Investment Schemes Manager approved by the Financial Sector Conduct Authority in terms of the Collective Investment Schemes Control Act.