Does your balanced fund outperform peers?

 
The Discovery flagship Balanced Fund range has delivered exceptional performance relative to its peers across the board while outpacing inflation and capitalising on attractive international assets to provide much-needed offshore exposure for your clients. The funds are run by Chris Freund, a leading portfolio manager with more than 20 years of investment experience and Samantha Hartard who has recently joined Chris Freund as the Co-fund Manager of the Discovery Balanced Fund.

Performance figures are net of asset management fees

Performance

Discovery Balanced

  • Diversified multi-asset approach that aims to deliver high returns with moderate volatility
  • Beat its peer group average (SA Multi Asset High Equity) by over 2% (over 1 year to August 2018)
  • Ahead of inflation by more than 4% (August 2018)
  • PlexCrown 5 crown fund
  • 5-star Morningstar rating

Discovery Moderate Balanced

  • Diversified multi-asset approach that aims to deliver stable income and capital growth with minimal volatility
  • Beat its peer group average (SA Multi Asset Medium Equity) by 1.6% (over 1 year to August 2018)
  • Ahead of inflation by 3.7% (August 2018)
  • PlexCrown 5 crown fund
  • 5-star Morningstar rating

Discovery Cautious Balanced

  • Diversified multi-asset approach focused on capital protection and generating stable returns
  • Beat its peer group average (SA Multi Asset Low Equity) by 2.5% (over 1 year to August 2018)
  • Ahead of inflation by 4.8% (August 2018)
  • PlexCrown 5 crown fund
  • 4-star Morningstar rating

Source:

Investec Asset Management as at end Q2 2018

Morningstar as at end December 2017

Performance figures are net of asset management fees

Benefits of investing in the Discovery Balanced Funds

Consistent returns

2018 has seen increased volatility across South African asset classes with equities delivering returns lower than in previous years while property has had significant volatility and major losses earlier this year. In this uncertain environment investors need access to funds that provide regular, consistent returns that are proven to stay ahead of inflation. The Discovery Balanced Fund has comfortably performed ahead of peers over 1, 3, 5, 7 and 10 year periods. The Discovery Moderate Balanced Fund and Discovery Cautious Balanced Fund has comfortably performed ahead of peers over 1, 3 and 5 year periods.

Appropriate multi-asset exposure

Investors are increasingly concerned about their exposure to SA-only assets versus international asset classes. As a multi-asset range of funds, the Discovery Balanced Fund range provides diversified exposure to asset classes and geographies globally, giving investors well-balanced and appropriate multi-asset exposure.

Geographic allocation of the Discovery Cautious Balanced Fund

Low-moderate or moderate risk and prudential investment guidelines

Investors benefit from a choice of three Balanced Funds with a low-moderate or moderate risk profile. The funds are suited to investors looking for a diversified mix of asset classes with an emphasis on capital protection and low-moderate or moderate risk.

Choose from the Discovery Balanced Fund range to benefit your investors

The Discovery Balanced Fund range offers investors a compelling investment proposition of consistent returns, focus on capital protection, low-moderate or moderate risk investment style. For more information about this fund range, click here.

Source: Morningstar as at end August 2018

Performance figures are net of asset management fees

  • Investec Asset Management as at end Q2 2018
  • Morningstar as at end December 2017
  • Morningstar as at end August 2018

Disclaimer

This article is meant only as information and should not be taken as financial advice. For tailored financial advice, please contact your financial adviser.

Discovery Life Investment Services Pty (Ltd): Registration number 2007/005969/07, branded as Discovery Invest, is an authorised financial services provider. Product rules, terms and conditions apply.

What to know before investing in collective investment schemes (unit trusts)

Before you invest in a collective investment scheme, there is important information you should know. This includes how we calculate the value of your investment, what affects the value of your investment, and investment charges you may have to pay. This notice sets out the information in detail. Speak to your financial adviser if you have any questions about this information or about your investment.

What the investment is

This Fund is a Collective Investment Scheme (also known as a unit trust fund) regulated by the Collective Investment Schemes Control Act, 45 of 2002 (CISCA). Collective investment schemes in securities are generally medium- to long-term investments (around three to five years).

Who manages the investment

Discovery Life Collective Investments (Pty) Ltd, branded as Discovery Invest, is the manager of the Fund. Discovery Invest is a member of the Association of Savings and Investment South Africa (ASISA).

You decide about the suitability of this investment for your needs

By investing in this Fund, you confirm that:

  • We did not provide you with any financial and investment advice about this investment
  • You have taken particular care to consider whether this investment is suitable for your own needs, personal investment objectives and financial situation.

You understand that your investment may go up or down

  1. The value of units (known as participatory interests) may go down as well as up.
  2. Past performance is not necessarily an indication of future performance.
  3.  Exchange rates may fluctuate, causing the value of investments with international exposure to go up or down.
  4. The capital value and investment returns of your portfolio may go up or down. We do not provide any guarantees about the capital or the returns of a portfolio.

How we calculate the unit prices and value the portfolios

  1. We calculate unit trust prices on a net-asset value basis. (The net asset value is defined as the total market value of all assets in the unit portfolio, including any income accrued and less any allowable deductions from the portfolio, divided by the number of units in issue.)
  2. The securities in collective investment schemes are traded at ruling prices using forward pricing. (Forward pricing means pricing all buy and sell orders of units according to the next net-asset value).
  3. We value all portfolios every business day at 16:00, except on the last business day of the month when we value the portfolios at 17:00.
  4. For the money market portfolio, the price of each unit is aimed at a constant value. This means that all returns are provided in the form of a distribution and that a change in the capital value will be an exception and only due to abnormal losses.
  5. Buy and sell orders will receive the same price for that day if we receive them before 11:00 for the money market portfolio and before 14:00for the other portfolios.
  6. We publish fund prices every business day, with a three-day lag, on the Discovery Website.  

About managing the portfolio

  1. The portfolio manager may borrow up to 10% of the portfolio’s market value from any appropriate financial institution in order to bridge insufficient liquidity.
  2. The portfolio manager can borrow and lend scrip.
  3. The portfolio may be closed in order to be managed according to the mandate (if applicable).

Fees and charges for this investment

There are fees and other charges for this investment.

The fees and charges that apply to this investment are included in the net asset value of the units and you do not have to pay any extra amounts. These fees and charges may include:

  • The initial fund management fee
  • Commission
  • Incentives (if applicable)
  • Brokerage fees
  • Market securities tax
  • Auditor fees
  • Bank charges
  • Trustee fees
  • Custodian fees

You can ask us for a schedule of fees, charges and maximum commissions.

The total expense ratio

  1. Total expense ratio means a measure of a portfolio's assets that have been expended as payment for services rendered in the management of the portfolio or collective investment scheme, expressed as a percentage of the average daily value of the portfolio or collective investment scheme calculated over a period of a financial year by the manager of the portfolio or collective investment scheme.
  2. A percentage of the net asset value of the portfolio is for fees and other charges relating to managing the portfolio. The percentage is referred to as the total expense ratio (TER).
  3. A higher TER does not necessarily imply poor return, nor does a low TER imply good return.
  4. The current TER is not an indication of any future TERs. If fees go up, the TER is also expected to increase.
  5. During any phase-in period, the TERs do not include information gathered over a full year.

Transaction cost

  1. Investors and advisers can use transaction cost (TC) as a measure to work out the costs they will incur in buying and selling the underlying assets of a portfolio.
  2. The transaction cost is expressed as a percentage of the daily net asset value of the portfolio calculated over three years on an annualised basis.
  3. Transaction cost is a necessary costs in administering the Fund. It affects the Fund’s returns. It should not be considered in isolation as returns may also be affected by many other factors over time, including:
  • Market returns
  • The type of fund
  • The investment decisions of the investment manager
  • The TER.
  1. Where a fund is less than one year old, the TER and transaction cost cannot be calculated accurately. This is because:
  • The life span of the fund is short
  • Calculations are based on actual data where possible and best estimates where actual data is not available.
  1. The TER and the TC shown on the fund sheet are the latest available figures.

Copyright Discovery Ltd is the licensed controlling company of the designated Discovery Insurance Group. Registration number: 1999/007789/06.
Companies in the Group are licensed insurers and authorised financial services providers.

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