Despite a positive quarter for global equity markets and continued strength in the local bond market, balanced retirement funds with global discretion, on average, still have negative returns over the one-year period ending June 30, according to the latest survey of retirement portfolios by Absa Consultants and Actuaries.
The survey tracks the performance of 95 portfolios controlling retirement funds worth about R150 billion.
Francois Viljoen, the manager of asset consulting at Absa Consultants and Actuaries, says the results of the quarterly survey show that the second quarter of 2003 was the best quarter for balanced portfolios since late 2001, as global stock markets and the local bond market performed very well.
"This reversed virtually all the losses of the first quarter, but was not sufficient to ensure that the average balanced portfolio achieved a positive return for the one-year period to the end of June 2003," he says. Over three years, however, such funds did outperform inflation despite difficult market conditions, he adds.
Omam Profile Capital, a conservative fund, is rated the top portfolio with global discretion over one year, with a return of 13.1 percent.
Second place over one year for global portfolios goes to Stanlib's Absolute Return, which returned 9.4 percent.
The third-best performer in this category is the Allan Gray Life Global Balanced portfolio with a return of 8.6 percent for the year.
With the strong rand hurting offshore investments over the past year, funds with a domestic-only mandate performed relatively well. Allan Gray's Life Domestic Absolute portfolio takes the top position here, returning 23.8 percent for the year.
Over three years Allan Gray's Full Discretion Global portfolio takes top honours for portfolios with a global mandate, returning 25.3 percent a year to the end of June 2003.
The runner-up is Oasis with a 20.5 percent per year return, while Foord Asset Management takes third spot, having made 20.5 percent a year.
For global portfolios over a five-year period Allan Gray comes out tops with a 30.1 percent a year return, followed by Foord with 27.9 percent and Oasis with 22.8 percent a year.
Over 10 years Allan Gray and Foord again take the honours, returning 22.5 percent and 21.5 percent a year respectively, followed by Quaystone's Investors Fund with 17.4 percent.
For global funds with an aggressive mandate, the Investec Inflation Opportunity fund returned 3.5 percent over one year.