Discovery Invest's Balanced Fund outperforms over all periods


The Discovery Balanced Fund has enjoyed top quartile performance over one, three, five, seven and ten years.

  • Ten years: 9.98% (benchmark: 8.19%)
  • Five years: 10.78% (benchmark: 8.37%)
  • Three years: 6.24% (benchmark: 4.09%)
  • One year: 10.85% (benchmark: 7.3%)

The benchmark for this fund is the peer group average.

The winning formula

Fund manager, Chris Freund says an active approach to both asset allocation and asset selection has been key in contributing to returns.

"Over the last few years we were more cautious in terms of our outlook and positioning in domestic growth assets, such as equities. Our preference has been global equities where we generated significant returns for our clients. That said, over the last few months we have become more constructive on the outlook for South Africa," he says.

Looking forward, the fund managers remain positive on the outlook for global growth but are on the constant look-out for signs of economies (and markets) overheating which could bring an end to the multi-year bull market investors enjoyed globally. Freund says that on the domestic front, management is very pleased with the changes seen on the political front, which should be positive for future growth expectations.


Current fund positioning

The Discovery Balanced Fund currently retains a fairly healthy allocation to domestic bonds with little exposure to domestic property and offshore bonds.

From an equity perspective, the unique investment philosophy has ensured that this fund delivers consistent returns, providing investors with a great investment opportunity. We select companies which are receiving positive earnings revisions and that are trading at reasonable valuations. We have chosen to maintain a significant exposure to domestic listed counters which will continue to benefit from the improving global environment (examples include Mondi, Naspers, Richemont and specific Resources such as Anglo American) where earnings are receiving positive revisions.

In the rest of the portfolio we currently have exposure to specific ‘SA Inc.’ counters where earnings expectations continue to improve against a more optimistic domestic back drop. Some of our key holdings include Standard Bank, Mr Price, Foschini and Imperial. The top five holdings currently are Naspers, Standard Bank, Anglo American, First Rand and Richemont.


Read more about our other top performing funds below

1. The Discovery Flexible Property Fund was listed as the third top performing unit trust fund in the entire collective investment scheme industry with an annualised return of 15.50% over the 10 years to end December 2017.

2. The Global Value Equity Feeder Fund was ranked as the fifth highest-performing fund in the entire collective investment scheme industry over three years and second highest-performing fund in the ASISA Global Equity General Sector over three years – by ASISA

3. The Discovery Moderate Balanced Fund has produced sterling results for investors, outperforming peers over all 3 and 5 year rolling periods since inception to the end of January 2018.

4. The Discovery Diversified Income Fund has also had a great month with improved rankings over the mid-term. In November, the market was very nervous with a flight of capital out of South Africa. However, after the ANC leadership election, bonds in particular pulled back from the brink providing a stellar return of just under 6% in December alone. Fund manager, Malcolm Charles expands.

*Sources: Investec Asset Management and Profile Data. All performance figures are as at 28 February 2018, sourced from Profile Data.



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