5-Year Track Record | Fairtree Global Equity Prescient Feeder Fund

Investment risk can be defined as the probability of the actual outcome differing from the expected return - when investing in shares, that refers to the chance of getting something wrong with the investment thesis. 

This can (and often does) happen for various reasons, including changing competitive landscape, regulation, geopolitics, company strategy, management or capital allocation. Behavioural bias and human error can also lead to errors. This is hardly an exhaustive list, and precisely why we choose to run a highly diversified Fairtree Global Equity Prescient Feeder Fund. We back our process and philosophy to be accurate more times than not rather than relying on a handful of stock calls. 

The fortunate thing is that not all investment mistakes lead to negative investment outcomes. Sometimes, you can 'look right' when share prices rise, but for the wrong reasons (get lucky). The opposite is also true - the market can also be wrong in the short term. It is important to be objective when analysing your results.

Since there is no easy way to measure investment risk, the market often resorts to using standard deviation as a proxy. Ironically, I often see share price volatility as an opportunity as it improves the entry and exit points of investments.

When it comes to investing in funds, it is probably true that the volatility of a fund's returns can lead to suboptimal timing of investments and divestments. This risk is accentuated when the fund has a style bias, like Value or Growth, which depends on the macro environment.

The Fairtree Global Equity Prescient Feeder Fund is style agnostic, and we aim to deliver consistent outperformance regardless of the macro cycle. This style agnostic and diversified fund, coupled with highly active management, translates into a lower standard deviation of returns. Graph 1 is the Fairtree Global Equity Prescient Feeder Fund returns over five years until September 2023, per Morningstar data.

Source: Morningstar as at (30 September 2023)

Disclaimer:

Fairtree Asset Management (Pty) Ltd is an authorised financial services provider (FSP 612). Collective Investment Schemes in Securities (CIS) should be considered as medium to long-term investments. The value may go up as well as down and past performance is not necessarily a guide to future performance. CISs are traded at the ruling price and can engage in scrip lending and borrowing. A schedule of fees, charges and maximum commissions is available on request from the Manager. A CIS may be closed to new investors in order for it to be managed more efficiently in accordance with its mandate. There is no guarantee in respect of capital or returns in a portfolio. Performance has been calculated using net NAV to NAV numbers with income reinvested.  The performance for each period shown reflects the return for investors who have been fully invested for that period. Individual investor performance may differ as a result of initial fees, the actual investment date, the date of reinvestments and dividend withholding tax. Full performance calculations are available from the manager on request. Annualised performance shows longer term performance rescaled to a 1-year period. Annualised performance is the average return per year over the period. Actual annual figures are available to the investor on request. Highest and lowest is returns for any 1 year over the period since inception have been shown. NAV is the net asset value represents the assets of a Fund less its liabilities. A Feeder Fund is a portfolio that invests in a single portfolio of a collective investment scheme which levies its own charges, and which could result in a higher fee structure for the feeder fund. Prescient Management Company (RF) (Pty) Ltd is registered and approved under the Collective Investment Schemes Control Act (No.45 of 2002). 

The portfolios included in the comparison are in the Global – Equity – General peer group. The funds selected for the comparison are the top twenty funds in the peer group over five years.

For any additional information such as fund prices, fees, brochures, minimum disclosure documents and application forms please go to www.prescient.co.za.