1 year ago

Blue Chip Issue 81

  • Text
  • Advisers
  • Institute
  • Planning
  • Financial
  • Financialplanning
  • Financialplanners
  • Solutions
  • Equity
  • Investments
  • Investing
  • Investors
  • Advisors
  • Momentum
  • Funds
  • Global
Blue Chip is a quarterly journal for the financial planning industry and is the official publication of the Financial Planning Institute of Southern Africa NPC (FPI), effective from the January 2020 edition. Blue Chip publishes contributions from FPI and other leading industry figures, covering all aspects of the financial planning industry. Blue Chip takes this opportunity to wish the FPI a happy 40th anniversary. Congratulations!


INVESTMENT Finding specialist global managers The investment opportunity set available to invest offshore is vast. There are specialist sectors and regions well positioned to benefit from growth drivers such as demographics, innovation, urbanisation and growing consumerism, and a greater quantum of companies in which to invest and diversify. There are also thousands of fund managers available globally that are looking to take advantage of these opportunities to create long-term growth for their clients. But how do clients decide which fund managers to choose to manage their capital? Not all managers are created equal, and the adage of “past performance is not necessarily indicative of future results” couldn’t be truer within the realm of asset management, which further complicates the decision. Within this conundrum lies the benefit of a multi-manager such as Momentum Global Investment Management (MGIM). Having established the business in London in 1998, the true benefit of MGIM is that we have a worldwide perspective. Our investment universe and our client base are truly global, which gives us unique insights into international trends, developments and opportunities on offer. Through this global breadth, we have spent 23 years creating global, well-diversified portfolios by carefully selecting skilled managers that we believe can add significant value over time. This entails looking beyond pure performance figures to understand the true drivers of returns, the investment teams behind the portfolio decisions, the style bias implicit in a philosophy, and the consistency and repeatability of the investment process. The success of this process is best evidenced by our core global equity solution, the Momentum GF Global Equity Fund1. With a track record going back to 2009, the fund blends nine specialist managers from around the world, including Robeco, Jennison, Rainier and Contrarius. Be it high-conviction, active strategies or data-driven, systematic strategies, the fund combines human intellect with data science by incorporating carefully selected managers for their specific investment style approach and some sort of competitive edge. This brings several advantages for our clients, including a blend of quality, growth and value investment styles, lower underlying management fees, and access to specialist global fund managers that many retail clients may otherwise not have access to. This large and long-established global equity solution is already available across the world and is now available to South African investors. A world of investment opportunity awaits and through providing access to specialist global investment managers, the Momentum GF Global Equity Fund has made investing in offshore equity that much simpler. 42 1 This fund is eligible for investment by the general public as the Financial Sector Conduct Authority has approved the application for solicitation in South Africa.

INVESTMENT A combination of both active and passive solutions is key to solving for the desired investment return outcomes over time. Systematic enhanced indexed funds: an attractive alternative to passive funds Passive strategies play a valuable role in financial markets today as they provide access to various market exposures (beta) and are a means to bring down costs. But passive funds are only a part of the solution, because in the same way cost does not equal value, passive alone does not solve for all investment outcomes. A combination of both active and passive solutions is key to solving for the desired investment return outcomes over time. There are now investment vehicles available that use the attributes of both solutions, combining the low-cost market exposures offered in passive funds with the positive alpha profile that is associated with a more active investment process. These investment solutions, known as enhanced index funds, employ a systematic data-driven and rules-based investment process to slightly overweight securities with attractive characteristics and slightly underweight stocks that are likely to contribute negatively to performance over time. Unlike passive funds, which closely track and hence earn the return of the benchmark, these systematic funds can generate stable outperformance after costs over time with a low tracking error against the benchmark. We established the Momentum GF Global Sustainable Equity Fund2 in May 2020 to provide investors around the world with access to the advantages of enhanced index funds. Now this fund is also available for South African investors. The Momentum GF Global Sustainable Equity Fund is a diversified, low-cost strategy that is well balanced across companies that exhibit value, momentum and quality characteristics, as these style factors have proven to show positive returns over the long term. Environmental, social and governance (ESG) factors are also incorporated in the investment process by excluding businesses deriving significant revenue from controversial business activities and ensuring a lower environmental footprint than its benchmark. By overweighting stocks with attractive style factors and reducing exposure to less sustainable companies, we believe the fund is more likely to achieve long-term stable outperformance versus its MSCI World benchmark. Robeco, a European-based investment manager with more than 25 years’ experience in systematic strategies and two decades experience in ESG integration, selects and continuously reviews all positions taken by the fund. Robeco truly is a world-class partner for our investors’ assets. Although passive funds have a place within investment portfolios, for costsensitive investors wanting to increase their chances of outperforming the market over the long term, enhanced indexed funds are a compelling alternative to consider. Speak to a Momentum consultant to find out more about these funds. 2 This fund is eligible for investment by the general public as the Financial Sector Conduct Authority has approved the application for solicitation in South Africa. Natalie Harrison, Global Fund Specialist, Momentum Collective Investments The editorials should be read in conjunction with the prospectus of Momentum Global Funds, in which all the current fees additional disclosures, risk of investment and fund facts are disclosed. The Fund is a sub-fund of the Momentum Global Funds SICAV, which is domiciled in Luxembourg and regulated by the Commission de Surveillance du Secteur Financier. The Fund conforms to the requirements of the European UCITS Directive. FundRock Management Company S.A., incorporated in Luxembourg, is the Management Company with its registered office at 33, Rue de Gasperich, L-5826 Hesperange, Luxembourg. Telephone +352 271 111. J.P. Morgan Bank Luxembourg S.A., incorporated in Luxembourg, is the Administrator and Depositary with its registered office at European Bank & Business Centre, 6, route de Trèves, L-2633 Senningerberg, Luxembourg. Telephone +352 462 6851. MGIM is the Investment Manager, Promoter and Distributor for the Momentum Global Funds SICAV. MGIM is registered in England and Wales No. 03733094. Registered Office: The Rex Building, 62 Queen Street, London EC4R 1EB. Telephone +44 (0)20 7489 7223 Email: MGIM is authorised and regulated by the Financial Conduct Authority No. 232357, and is an authorised Financial Services Provider pursuant to the Financial Advisory and Intermediary Services Act 37 of 2002 in South Africa (FSP no. 13494).

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