PEREGRINE INFLATION PLUS 5 FUND Nimble inflation beater
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.