The Ran­more Global Eq­uity Fund

An In­vest­ment Worth In­ves­ti­gat­ing

Indwe - - Contents - Text: Sup­plied Images © Sup­plied & iStockphoto.com *Based on Morn­ingstar data.

Sean Peche launched the Ran­more Global Eq­uity Fund in Oc­to­ber 2008 in the midst of the global fi­nan­cial cri­sis, and R100 in­vested in the USD class at launch has grown to R360 as at the end of Fe­bru­ary 2018*. But, as with in­vest­ing in most types of funds, one’s cap­i­tal is al­ways at risk and past per­for­mance is no in­di­ca­tor of fu­ture per­for­mance. The fund’s man­date is to in­vest in a di­verse port­fo­lio of pri­mar­ily large and mid-sized lead­ing global com­pa­nies from a range of in­dus­try sec­tors. We spoke to him to find out more.

How can you run a global eq­uity fund from a sin­gle lo­ca­tion in the UK?

In one word, tech­nol­ogy. About 30 years ago you needed an army of an­a­lysts to run around the world vis­it­ing com­pa­nies, but these days you can down­load his­toric fi­nan­cial data, an­nual re­ports and meet­ing tran­scripts in sec­onds. Many of the world’s best fund man­agers are to­day lo­cated far from global fi­nan­cial cap­i­tals, in places like Ber­muda and Mau­ri­tius.

WHY DO YOU RUN A GLOBAL FUND? We are in­creas­ingly global cit­i­zens – we hol­i­day in­ter­na­tion­ally, and buy cars, food, smart­phones, com­put­ers and clothes man­u­fac­tured world­wide. There­fore, we need to pre­serve and grow our wealth in in­ter­na­tional terms. On a per­sonal level, I try to do that by gain­ing ex­po­sure to a bas­ket of in­ter­na­tional cur­ren­cies and earn­ings via the share prices of some of the best busi­nesses and in­dus­tries across the world. While it’s very easy to­day to in­vest in­ter­na­tion­ally, for his­tor­i­cal rea­sons many peo­ple still in­vest pri­mar­ily in their do­mes­tic mar­kets. From a reg­u­la­tory point of view, the Ran­more Global Eq­uity Fund is ap­proved for dis­tri­bu­tion in South Africa in terms of CISCA (Col­lec­tive In­vest­ment Schemes Con­trol Act, reg­u­lated by the FSCA, for­merly the FSB).

CAN SOUTH AFRICANS IN­VEST IN THE RAN­MORE GLOBAL EQ­UITY FUND? Yes. I rec­om­mend that in­vestors ob­tain in­de­pen­dent fi­nan­cial and tax ad­vice when de­cid­ing on whether to in­vest di­rectly off­shore in a prod­uct. How­ever, our Fund is avail­able on many of the lead­ing lo­cal off­shore plat­forms. Ask your in­de­pen­dent fi­nan­cial ad­vi­sor to con­tact us.

WHAT ABOUT THE RISE OF PAS­SIVE IN­VEST­ING STRATE­GIES WHICH SEEK TO TRACK THE PER­FOR­MANCE OF A PAR­TIC­U­LAR BENCH­MARK IN­DEX SUCH

AS THE MSCI WORLD IN­DEX? Pas­sive in­vest­ing has grown markedly in re­cent years, and ad­vo­cates will cite that it re­moves the risk as­so­ci­ated with a man­ager’s stock se­lec­tion, which is in­her­ent in an ac­tive fund like ours. Pas­sive funds clearly have a role in in­vest­ment strate­gies. But pas­sive funds also charge fees, and so gen­er­ally un­der­per­form their bench­mark. Fur­ther­more, pas­sive in­vest­ing also means you have hardly any chance of out­per­form­ing the mar­ket.

WHAT ABOUT THE HIGH FEES OF

AC­TIVE MAN­AGERS?

In my opin­ion, high fees and espe­cially per­for­mance fees are often not in the client’s best in­ter­ests. Some fund man­agers claim it “aligns in­ter­ests” or “cre­ates an in­cen­tive”, but other pro­fes­sion­als such as doc­tors and pi­lots don’t need in­cen­tives to do their best, so why should we? I think a far bet­ter way to en­sure in­vestors’ in­ter­ests are aligned with the as­set man­ager is if your fund man­ager has all their in­vestible as­sets in­vested along­side clients in the same feep­ay­ing classes.

Sean Peche

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