PERE­GRINE INFLATION PLUS 5 FUND Nim­ble inflation beater

Finweek English Edition - - Creating Wealth - MARC ASH­TON

AR­TI­FI­CIAL STIM­U­LUS into the fi­nan­cial sys­tem has meant inflation is likely to be a ma­jor threat to your in­vest­ments over the com­ing years. If your unit trust isn’t bench­marked to beat inflation – and by a de­cent mar­gin – you could find your wealth go­ing back­wards.

Lo­cal in­vest­ment firm Pere­grine iQ – a sub­sidiary of JSE-listed Pere­grine Hold­ings – op­er­ates three funds of­fer­ing re­turns of CPIX +3%, 5% and 7% over a rolling three-year pe­riod. All three re­tail funds are rel­a­tively new, hav­ing been es­tab­lished in April last year, and that must be taken into con­sid­er­a­tion when as­sess­ing their his­tor­i­cal per­for­mances, which has them ranked in the bot­tom quar­ter of their sec­tor rel­a­tive to their peers.

Over the past 12 months the Pere­grine Inflation Plus 5 fund has de­liv­ered a re­turn of -4,87% and is ranked 180th of 442 funds. Unin­spir­ing stuff – un­til you re­mem­ber that to out­per­form over the next three to five years, a unit trust is prob­a­bly go­ing to need to have two main char­ac­ter­is­tics: a good in­vest­ment team and be­ing small enough to al­low real re­turns to come through. And th­ese are the rea­sons the Inflation Plus 5 fund is be­ing fea­tured here.

The Pere­grine brand has tra­di­tion­ally been as­so­ci­ated with the up­per end of the mar­ket, with the com­pany reg­u­larly scor­ing highly in an­a­lyst and fund man­age­ment in­dus­try re­views. A fund of this na­ture with a min­i­mum in­vest­ment of R500/month gives the op­por­tu­nity for mid­dle-in­come re­tail in­vestors to ac­cess th­ese skills for rel­a­tively low risk and cost.

In terms of size, at the end of the past quar­ter the fund had around R195m in as­sets, giv­ing the man­ager some room to move around and gen­er­ate real re­turns for in­vestors.

The fund is a tar­geted ab­so­lute re­turn and real re­turn fund aimed at in­vestors with a min­i­mum of a three-year in­vest­ment view. With the out­look for eq­uity mar­kets still muted the fund has a 43% eq­uity al­lo­ca­tion, of which 50% is in in­dus­tri­als.

Tony Bell, who heads busi­ness de­vel­op­ment at Pere­grine iQ, man­ages the fund. He was pre­vi­ously chief in­vest­ment of­fi­cer at Syfrets and Nedcor In­vest­ment Bank As­set Man­age­ment.

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