By Jeff Prestridge Spectacular? No ...but it will give you an income

THERE is nothing spectacular about investment fund Sanlam Multi-Strategy. Indeed, from a performance perspective, it’s spectacularly dull, but then manager Mike Pinggera wouldn’t have it any other way.

This is because the objective of the £191 million fund is as much to protect investors’ wealth as it is to grow it. In the process this provides those who buy into the concept a stable income, equivalent to around three per cent per annum – with the opportunity of a little capital growth on top. Over the past five discrete 12-month periods, it has generated overall positive returns (capital plus income) on four occasions – 5.4 per cent, 3.1 per cent, 7.9 per cent and 2.1 per cent respectively. In the 12 months to end of April 2016, it registered losses of 0.5 per cent.

In total, over the past five years, it has registered a total return of 19.1 per cent – half that from the FTSE All-Share (37 per cent) but without all the price volatility along the way. A Steady Eddie.

Although it will never shoot out any investment lights, Pinggera says the fund is a great ‘portfolio diversifier’ – a counterpoint to a full-blown equity fund. He says: ‘It’s popular with many private clients who like the steady income that they can take every month.’ It is also liked by charities and many institutional investors because of its dependability and cautiousness.

Pinggera describes the investment philosophy as a simple one. He says: ‘As a manager of people’s wealth, I try not to lose them money and make it when I can. It means participating in equity markets when you can, and defending assets when you have to. I don’t try to make money in every environment.’

The result is a fund with diversification across a range of assets, including bonds, equities and alternative investments. But the bulk of the portfolio comprises income-producing assets – a core that Pinggera refers to as the fund’s ‘stability’ element.

These assets, accounting for 90 per cent of the fund’s holdings, primarily comprise short-dated government and corporate bonds, typically with no more than two years to go before they mature. Bonds are issued by firms such as Tate & Lyle and Imperial Brands.

It also includes a number of holdings in income-producing assets such as Grainger (one of the country’s largest private landlords) and Hipgnosis Songs Fund that generates a tidy revenue from its extensive music catalogue. In addition, it has stakes in income-friendly infrastructure and renewable energy funds. The ‘icing’ on the fund’s cake is provided by the ‘growth’ element – some 10 per cent of the fund’s assets that are employed to help boost returns when equities are in advance mode. This element came into its own, says Pinggera, in both 2016 and 2017 when the fund was more in ‘participating’ than ‘defensive’ mode. Since Pinggera started running the fund in early 2013, it has delivered more calendar months of positive than negative return with the best month being July 2017 (plus 3.37 per cent) and the worst January 2016 (minus 2.49 per cent).

Since August 2015, it has steadfastly delivered a monthly income of 0.25 per cent and Pinggera sees no reason why this cannot continue.

The fund is part of Sanlam Investments, the funds division of Sanlam UK which is a subsidiary of global business Sanlam Group, based in South Africa. Assets managed in the UK are in excess of £12 billion.

As a manager of wealth I try not to lose people money and make it when I can