Splen­did per­for­mance by the Edge 28 fund

Finweek English Edition - - FUND FOCUS -

The Old Mu­tual Edge 28 Life Fund has t urned in a phe­nom­e­nal an­nu­alised re­turn of 17.8% (to June) in its f irst three years and at­tracted more than R3bn in as­sets un­der man­age­ment.

This is well in ex­cess of its CPI + 6% per­for­mance tar­get and the per­for­mances of other bal­anced funds, which strug­gled to gen­er­ate lit­tle more than a nom­i­nal 5%.

A unique Reg­u­la­tion 28 fund, Edge 28 is man­aged by Old Mu­tual In­vest­ment Group’s MacroSo­lu­tions bou­tique head, Peter Brooke, and eq­ui­ties spe­cial­ist Arthur Karas.

“No-one has any­thing like it and we’ve used the full f lex­i­bil­ity of the Reg­u­la­tory changes to drive it,” says Brooke. “The fund in­vests pri­mar­ily in growth as­sets with the max­i­mum as­set al­lo­ca­tion un­der Reg­u­la­tion 28. It’s mostly in­vested in eq­ui­ties, listed prop­erty and al­ter­na­tives – such as pri­vate eq­uity and hedge funds – with a small ex­po­sure to fixed in­ter­est and cash.”

One rea­son that MacroSo­lu­tions can do this, he ex­plains, is be­cause the prod­uct is not set up as a unit trust, but as a life wrapped fund on the Old Mu­tual plat­form with ac­cess to all its build­ing blocks in a com­pli­ant man­ner.

Cur­rently more than 10% of the fund is in­vested in pri­vate eq­uity and hedge funds, which are geared to gen­er­ate su­pe­rior long-term re­turns. On the eq­ui­ties side it’s able to lever­age most of Old Mu­tual’s of­fer­ings, in­clud­ing its in­ter­na­tional as­sets.

“The fund is ideal for some­one wish­ing to in­vest over at least a 10-year pe­riod,” says Brooke. “We wouldn’t rec­om­mend it over three years. If you’re mod­estly con­ser­va­tive and near­ing re­tire­ment, you’d prob­a­bly be best ad­vised to skip down a level on the risk side. On the other hand […] peo­ple are in­creas­ingly likely to live

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