ALEXANDER FORBES INVESTMENTS
GLOBAL OFFERING At this point, Dawie and Gyongyi would have highlighted the business and investment cases that give our global offering a commanding position in the industry. As Head of Portfolio Management at Alexander Forbes Investments, I would like to take this opportunity to demonstrate how the combination of our local knowledge and Mercer’s global expertise has yielded real, positive results for our clients.
The beauty of this approach is that it allows us to capture different sources of return and generate smoother, more dependable return streams over time. The relationship we have with Mercer is a key enabler in harnessing the benefits of this approach beyond our borders.
Purposeful diversification Part of my role at Alexander Forbes Investments is to structure portfolio solutions that give our clients the highest probability of reaching their investment objectives, with as little stress and anxiety as possible. To do this, we find solid investment opportunities, identify risks and blend different asset classes, complementary investment strategies and top-rated asset managers together to build diversified portfolio solutions. We call this process purposeful diversification, and it is this process that allows our clients to sleep well at night knowing it has all been taken care of.
SENZO LANGA
Head: Portfolio Management
|1|
ALEXANDER FORBES INVESTMENTS GLOBAL OFFERING | SENZO LANGA
Enhancing global investment allocations Over the period that our relationship has been in effect, we transitioned all our offshore portfolios to invest in a range of Mercer global building block portfolios rather than us researching and choosing offshore asset managers ourselves. We determine the appropriate global asset allocations across our respective portfolio solutions and make use of different Mercer building block portfolios, at different times, to implement our views and manage risk in line with these objectives. Mercer’s unrivalled intellectual capital and leading position on the global stage strengthens our global offering, allowing us to efficiently and cost effectively incorporate a more diversified suite of high-quality investment options in our offshore investment allocations. This also enables us to focus on our overall portfolio solutions for our clients in a more holistic way. There are many examples that can demonstrate how our relationship has benefitted our clients.
Case in point The Alexander Forbes Investments Global Equity portfolio is our best-view, multi-managed global equity portfolio, which aims to grow investors’ savings over the long term. The table on the right shows the underlying Mercer building blocks deployed within this global portfolio.
Global Equity performance returns (at 30 June 2021) 1 year
3 years (ann)
5 years (ann)
Global Equity
18.74%
18.18%
15.33%
Benchmark (MSCI AC World (RID))
16.19%
16.58%
14.13%
Why is Global Equity doing so well? Purposeful diversification. 1 Building block portfolio Active Global Equity
2 Strategy implementation Active Passive
Value
Growth
x
x
Bias towards cheaper stocks over expensive ones
Bias towards companies with high expected growth earnings
x
Passive Emerging Markets Equity Passive Global Equity
Style diversification Quality x
Size
Momentum
x
x
x x What the strategy entails Select Track investments in developed global stocks and emerging identified as market indices attractive What the strategy looks to do in the portfolio Match the Outperform performance the market of the market
What the style entails Bias towards companies with capable management, sustainable earnings and in strong financial standing
Bias towards Bias towards companies stocks that with a smaller have recently market performed well capitalisation
What the style looks to do in the portfolio Returnenhancing
Returnenhancing
Return-enhancing
Returnenhancing
Risk-adjusted returns
Source: Alexander Forbes Investments representative data at June 2021
Alexander Forbes Investments portfolio
Underlying Mercer building block portfolio Active Global Equity
Global Equity
1 Asset allocation [reduced risk] Investments are spread across different opportunity sets to capture differentiated sources of return.
Passive Emerging Markets Equity Passive Global Equity |2|
2 Strategy selection [competitive returns] Investments are diversified across attractive and complementary investment strategies that are expected to add value over time.
ALEXANDER FORBES INVESTMENTS GLOBAL OFFERING | SENZO LANGA
3 3
Asset manager selection [consistently competitive returns] Highly rated asset managers are appointed and blended to produce repeatable investment outcomes.
We are not an asset manager. We do not trade stocks; we are not a brokerage house or investment bank. This means that our global portfolio solutions are built using the best and most innovative ideas from across the global asset management industry. If we believe they can add value to our strategies, we employ them where appropriate. The decisions we have taken within our own global portfolios looked to ensure that they remained well positioned to meet our clients’ investment goals into the future. I am certain that we can apply our same thinking, skill and capabilities to propel your global investment strategy forward.
Active strategy MGI Global Equity Fund Underlying asset manager Arrowstreet Capital Wellington Management
Role Opportunistic in changing markets
Attractive risk-adjusted returns and downside protection Superior performance and excess Baillie Gifford return prospects Superior performance and excess Alliance Bernstein return prospects Superior performance and excess Maj Invest return prospects Blend
Allocation
Value
26%
x
Growth
Quality
x
x
15%
x
x
18%
x
x
x
100%
x
Momentum x
20%
21%
Size
x
x x
x
x
x
Source: Alexander Forbes Investments Representative data at June 2021
Best regards
Senzo
Alexander Forbes Investments Limited is a licensed financial services provider, in terms of section 8 of the Financial Advisory and Intermediary Services Act 37 of 2002, as amended, FAIS licence number 711. This information is not advice, as defined and contemplated in the Financial Advisory and Intermediary Services Act 37 of 2002, as amended. The value of a portfolio can go down, as well as up, as a result of changes in the value of the underlying investments, or of currency movement. An investor may not recoup the full amount invested. All policies issued or underwritten by Alexander Forbes Investments are linked policies, under which no guarantees are issued. The policy benefits are determined solely on the value of the assets, or categories of assets, to which the policies are linked. Past performance is not necessarily an indication of future performance. Forecasts and examples are for illustrative purposes only and are not guaranteed to occur. Any projections contained in the information are estimates only and are not guaranteed to occur. Such projections are subject to market influences and contingent on matters outside the control of Alexander Forbes Investments, so may not be realised in the future. Please be advised that there may be supervised representatives. Company registration number: 1997/000595/06. Pension Fund Administrator number: 24/217. Insurer number: 10/10/1/155. Postal address: PO Box 786055, Sandton 2146. Physical address: 115 West Street, Sandown 2196. Telephone number: +27 (0) 11 505 6000. The complaints handling procedure and conflict of interest management policy can be found on the Alexander Forbes Investments website: www.alexanderforbesinvestments.co.za.