STANLIB fund triumph shows itâ€™s fine to be eurocentric
BEING Eurocentric in global investment markets pays off handsomely, if the award-winning success of STANLIBâ€™s European Fund of Funds is anything to go by.
The fund, one of the top performers in the product line-up at South Africaâ€™s largest unit trust company, last night (Wed. Feb. 1) won the honours in the rand-based foreign equity fund category of the annual Raging Bull Awards.
The award was collected by Paul Hansen, head of retail investing at STANLIB and manager of the companyâ€™s European Fund of Funds.
Last year, the unit trust achieved 26.5% growth in rand terms and averaged annual growth of 10.85% over three years â€“ twice the gains of its only direct competitor.
Hansen commented: â€œLast year, most attention was focused on strong equity gains in the domestic market. The performance of our European fund was a reminder that substantial returns are possible offshore while actively managing risk through international diversification.
â€œThe award confirms the appropriateness of last yearâ€™s decision to adopt a fund-of-funds structure to enable broader allocations into some aggressive and small-cap funds with significant exposure to some high growth economies in Eastern and Central Europe.
â€œWell researched stock selection in some extremely dynamic markets added significant upside. The net effect was to balance positions in well established, blue-chip companies based in Western Europe and the UK with high growth counters from further east.â€
The previous structure encouraged an institutional focus with heavy reliance on major corporate players in fully developed economies.
Hansen said the success of the new strategy of injecting a high growth component into the previous mix could be measured by reference to the Dow Jones Euro Stoxx 50, an index of Europeâ€™s biggest listed groups. In 2005, the STANLIB European Fund of Funds achieved more than double the growth recorded by this key benchmark.
The Raging Bull Awards, the â€˜Oscarsâ€™ of the unit trust industry, were presented at a glittering gala dinner in Camps Bay, Cape Town. The awards programme is organised by the Association of Collective Investments and Personal Finance
CAROL DUNDAS for Stanlib
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