According to a statement released today Colin Donian, MD of Nedcor Bank Management Company says: "The new Nedbank risk-profiled Fund of Funds are ideal for those investors who are unsure of which individual unit trusts to invest in. In essence, the product design and its ongoing management assist clients with their investment decision. A particular advantage of the Fund of Funds is the nature of the diversification across a number of facets; asset classes, management houses, fund managers and styles. There is also an additional layer of management in the form of multi-managers to manage risk, volatility and return. Investors are therefore presented with the opportunity to diversify across multiple individual funds and manage their risk and returns by investing in the Nedbank Fund of Funds."
The three fund of funds will be managed at the multi-manager level by Nedcor Investment Bank International (NIBi). These risk-profiled funds of funds include unit trusts managed by asset managers selected from a wide spectrum of South African asset management companies. Their selection and degree of inclusion is based on their styles and proficiencies as well as the objectives that the risk profiled fund of funds are mandated to achieve.
NIBi will spread the risk associated with a single fund manager from a single asset manager, and aim to achieve returns consistent with each portfolio`s risk profile.
A major portion of the aggressive fund of funds will be invested in domestic equities and cash. In the long term, the fund will aim to achieve above average performance with relatively low levels of long-term volatility.
The balanced fund of funds is considered medium risk, designed for investors seeking long-term portfolio growth and who are prepared to accept some short-term volatility. The conservative fund of funds will target the risk-averse investor, seeking long-term capital growth within a low risk environment. In the latter case there will be limited exposure to the equity market, namely 50%. In addition, due to the structure of the Balanced and Conservative Funds, they comply with Regulation 28 of the Pension Funds Act, which makes them ideal for retirement-focused investments.
Potential investors in the Nedbank risk-profiled Fund of Funds are required to make an initial minimum investment of R2000, or a debit order of R300 per month. There is no limit on the maximum amounts invested.
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