Money …
PROTECTING THE VALUE OF YOUR OFFSHORE NEST EGG BY CHRISTO LINEVELDT, INVESTMENT SPECIALIST, CORONATION FUND MANAGERS
I
nvesting offshore right
more downside risk than ever
need to prioritise the protection
in the Fund do get access
now may seem like a risky
before. At the same time, the
of their capital.
to Coronation’s 21-year
endeavour when stocks are
five-month rally in US equities
Global Capital Plus is
track record of managing
trading at record highs and
out of a bear market slump
globally unique, given that it
global multi-asset class
income investments at record
has raised concerns that stock
is a balanced fund that has
funds. As such, the Fund is
lows. Add a global pandemic in
markets may have moved
dual objectives: delivering a
comfortably positioned in the
the background and the only
too far, too fast to justify their
respectable real return while
top quartile of similar global
thing that seems certain is that
elevated valuations.
keeping a careful eye on
funds that are available to
risk. It gives retirees access
South African investors over
the future is very uncertain. But then again, South
It’s at times like these that diversification becomes even
to asset classes that will
five and ten years, as well as
Africa has its unique
more critical: diversification
outperform cash and inflation
since inception.
emerging market challenges
across asset classes,
over time, with a mandate
and history has shown that
countries, stock markets and
that allows for more than half
global fund, Coronation
offshore exposure is an
currencies. But how do you
of the portfolio to be invested
has built up substantial
important diversifier for
do so without exposing your
in growth assets.
international investment
local investors. Otherwise,
capital to undue risk?
all their wealth is vulnerable
Investors who want
Since launching our first
The investment philosophy
expertise and research
of the Fund is the same as our
capabilities. The global
to currency volatility, an
to incorporate more
medium-risk global balanced
team comprises 22 skilled
economy that is struggling
conservative offshore
fund but is optimised for
investment professionals with
to deliver and, at times,
exposure in their portfolios
risk first. As such, it is
the expertise required to invest
heightened political risk.
while still achieving
invested in growth assets like
in non-South African shares
reasonable real returns of
equities, real assets (such as
across developing, emerging
interest rate environment, cash
In a lower-for-longer
between 2% to 3% in USD
infrastructure and property)
and frontier markets.
effectively yields 0% in the
over time will find this in the
and equity-like fixed interest
developed world. Thus, if you
Coronation Global Capital
income instruments. The
investor, we do proprietary
want to achieve consistent real
Plus Fund.
balance of the portfolio
research on the available
is invested in assets that
investment opportunities
returns in hard currency but
The Fund is actively
As a bottom-up, active
cannot tolerate risk, you need
managed, has a low-risk
offer inflation protection,
across the world. We then
to invest with a fund manager
exposure and is invested across
absolute returns and capital
blend the most promising
who knows how to navigate the
asset classes. While it contains
preservation.
investment opportunities we
risks and opportunities that
some of our best investment
arise in what are undoubtedly extraordinary conditions. Traditionally considered
The Fund is managed to
have identified into resilient
ideas for global growth, it has
preserve the dollar value of
portfolios that are tailored to
been moderated for investors
the fund over rolling 12- to
deliver risk-adjusted returns
with less tolerance for risk,
24-month periods. Bear
that meet our investors’ needs,
low-risk assets, fixed interest
such as retirees who are at the
in mind this target is not
no matter how challenging the
instruments are now exhibiting
stage of their life when they
guaranteed, but investors
global environment may be.•
18
SILVER DIGEST // SPRING 2020
