Rezco Value Trend Goes 5 Star
Rezco Value Trend fund recently celebrated its 3-year anniversary in style by receiving a 5-star rating from Morningstar/Standard &Poor’s. This is an exceptional milestone and one that is not easily achieved. As an investor you may ask, “What exactly does this mean to me?” The Star Rating was devised by S&P as a way to measure
- the average percentage that a fund has outperformed its peers and
- how much this average out performance varies over a 3-year period
Only 10% of Funds achieve this rating. We are most grateful and privileged to have delivered this consistent out performance to you as our valued client.
Rezco Tops 3 Year Performance Tables
- Based on level monthly contributions Rezco Value Trend is the top performing Flexible Fund for the three year period to Sep 2007. This is most satisfying to the investment management team as three years is regarded as the most important measurement period for long term investors.
- A level monthly investment has yielded a 33.79% compound return per annum. A lump sum invested on 30 September 2004 had given a return of 35.7% per annum.
- Our objective is to achieve long term consistent returns. On the same-level-monthly contribution basis the fund is 3rd in its class over 2 years and 5th over 1 year.
Investment Philosophy – Cautious
The Rezco Value Trend fund is a conservative balanced fund suited to investors with a low risk tolerance but who wish to achieve a high investment return from a balanced investment portfolio. Our typical investor has an important segment of his investment capital in the fund and is looking to us to achieve a balance between risk and return. For this reason the fund adopts a cautious approach. We know that we have cost the fund performance by sometimes being too conservative but we accept that insurance is expensive.
Over the past three years the fund has on average been 76% invested (see Figure 1). This has been as high as 95% and as low as 48%. The intention is to average 75% over the long term. The fund is therefore an alternative to a prudential balanced fund, for investors who are not subject to Sec 28 of the Pension Funds Act.
How did the recent sub-prime crisis affect the Rezco Fund?
It was most satisfying to see how the fund fared during the recent market turbulence. The graph below (figure 2) gives a clear picture of the stability of the fund. The Rezco fund (blue line) showed far less volatility than the overall market (red line). This is accordance the funds’ objectives.
Current Investment View
The recent major crisis in world banking system seems to have resolved positively. This is mostly because the central banks have supplied unlimited liquidity. The USA fed has also been forced to ease monetary policy earlier than it would have chosen, possibly at the expense of higher inflation later. On top of this, the view that emerging markets may in fact offer less risk than developed ones, has ensured a major rebound in all emerging markets. We have started to move our equity exposure upwards as we become more convinced of the sustainability of the rally. Of major concern to us is the ongoing leadership crisis within the ANC. This has the potential to unnerve foreign investors, especially given our high current account deficit.
We have retained our maximum off-shore exposure. It is highly likely that this will under-perform but is central to our belief that investors should have a diversified portfolio.