The Ranmore Global Equity Fund
An Investment Worth Investigating
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
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.