The fund aims to offer superior returns over the medium to longer term by investing in shares from around the world. FUND INFORMATION:
Fund manager insights:
Despite the recent investor euphoria and indices attaining historical highs on expectations of 2017 heralding a new inflationary, pro-growth regime, global equities face a variety of prospective headwinds and challenges, says Ian Heslop, fund manager of the Old Mutual Global Equity Fund.
However, according to Heslop, the opportunity set has broadened, particularly for those managers with an investment process focused on stock selection.
“In seeking to prepare or anticipate the effects of these prospective opportunities and uncertainties to return structure, flexibility and diversification of approach to stock selection is likely to remain a mainstay in mitigating volatility and maintaining the consistency of portfolio returns,” he says.
According to him many active managers using big macro calls can be tripped up by how hard it has been to get forecasts right, for example on Brexit and Donald Trump’s victory in the US presidential elections.
“At Old Mutual, rather than trying to forecast binary events and then forecast the impact of the event on the market, we look to understand how the market is evolving as the events unfold. In our opinion, understanding how investor behaviour is changing is better than forecasting the oil price. We also use a very flexible approach, with the portfolio not being wedded to any particular style.”
Heslop says good diversification across a number of investment styles has helped them to avoid being hit by the big style rotations over the past few years and is at the heart of what they do.
“We build portfolios with the express understanding that nothing works all the time. The funds are diversified across a number of styles or themes to reduce the risk of significant drawdown when one style (e.g. value, growth, quality etc.) is out of favour for whatever reason. We look to tilt the portfolio away from styles likely to underperform given the current market environment.”
He says an investment in the fund is a good way to add diversification to a South African investor’s holdings.
“An offshore fund naturally diversifies holdings into different currencies and also different sectors or industries than those seen in the SA market.”
Why finweek would consider adding it:
For the fifth consecutive year, the Old Mutual Global Equity Fund was recently awarded top performance by a Domestic Collective Investment Scheme for the three-year period ending 31 December 2016 in the category Best (SA-Domiciled) Global Equity General Fund at the 2017 Raging Bull Awards.
The fund has returned 27% per annum over the five years to end December 2016, compared to the MSCI World Index’s return of 23.4% per annum over the same period. It returned 12.2% per annum over 10 years to end December 2016, versus the index at 11.6% per annum.