Sarasin IE Multi Asset Strategic Fund

FUND MANAGER: HENNING MEYER

♦ Raging Bull Award for the Best (FSCA-Approved) Offshore Global Asset Allocation Fund (risk-adjusted performance over five years to December 31, 2021)

WITH origins in the Swiss private bank J Safra Sarasin Group, Sarasin Investment Management was established in 1983 as a London-based asset manager with a focus on global, thematic investments. After acquiring Chiswell Associates in 2004, the business was known as Sarasin Chiswell, until it was converted to a partnership in 2007. The company has more than £18 billion in assets under management.

Sarasin has a licence from the Financial Sector Conduct Authority to market six of its funds in South Africa, which are denominated in British pounds, US dollars, or both. The funds are marketed in the country by the Prescient group.

The Sarasin IE Multi Asset Strategic Fund was launched in March 2008. It delivered an annualised return of 6.68% in US dollars over the five years to the end of 2021.

According to the fund’s fact sheet, the fund seeks to achieve a return ahead of inflation over the long-term through investment in a range of asset classes. It invests globally in a combination of assets - predominantly these are shares and company or government bonds.

Typically between 20% and 60% of the fund's assets are in shares (equities). It is not constrained by geography, sector or style but manages risk through a variety of theme characteristics. Derivatives (financial instruments whose value is linked to the expected future price movements of an underlying asset) may be used only with the aim of reducing risk or costs, or generating additional capital or income.

As at the end of December 2021, the asset mix was: equities 44.8%, fixed income 37.0%, liquid assets 11.3%, and alternative Investments 6.8%. The five top equity holdings were: Microsoft 1.9%, Alphabet 1.7%, Amazon 1.7%, Dutch semiconductor company ASML (1.5%) and Home Depot (1.5%).

Personal Finance asked fund manager Henning Meyer about how the fund is managed.

Please outline your investment strategy for the fund.

The strategy seeks exposure to a wide range of asset classes, including equities, bonds, cash, commodities, alternatives and listed property. We invest globally, as we think it matters less where a company is listed, this allows us to choose our best ideas from the widest available investment universe. We are active investors, investing in companies where we believe the longterm economic profits are not reflected in their market valuations.

At the core of everything we do is our thematic investment process, which aims to identify long-term structural trends that will shape the investment landscape for years to come, and identify companies that will benefit from these trends. Finally, we take a responsible ownership approach to all our investments. Environmental, social and governance factors are fully integrated into the analysis of every investment we make. Once owners, we actively engage with the companies we invest in and are proactive in seeking change where necessary.

How are you positioning the fund going into 2022 considering the uptick in inflation, the expected relaxation of stimulus by central banks, and geopolitical issues?

For a number of reasons the fund has been positioned relatively cautiously throughout most of 2021 and heading into 2022. First, the continuing pressure on global supply chains coupled with a tight US labour market implies higher inflation for longer, so we remain strongly underweight fixed income securities, while the credit quality of our corporate bonds remains strong.

Second, we have only been modestly overweight equities on the back of still strong global growth and robust earnings and dividends, but employed protective option strategies to hedge shorter-term market weakness.

Third, we will remain cautious for a while longer on emerging markets, while noting that in the longer term at least some of the regulatory agenda in China is to be welcomed. Finally, we won’t be afraid of holding higher than normal cash balances – yes, cash yields are effectively zero but today’s market challenges make short-term market setbacks more likely. | Martin Hesse