At the Raging Bull Awards gala dinner held at the V&A Waterfront on January 31, the second big management company award was for unit trust companies that are domiciled offshore and whose funds are approved by the Financial Services Board (FSB) to be marketed to South African investors.
The Raging Bull Award for Offshore Company of the Year (2017) was shared between Investec and Nedgroup Investments, which tied for first place.
Offshore funds differ from local funds that invest offshore, which are included under the domestic unit trust sub-categories. They are denominated in currencies such as United States dollars, and they invest globally or in specific overseas markets, such as the United States or the Eurozone. Many South African asset managers have bases offshore where they manage such funds, although international managers that are permitted to market their funds in South Africa also qualify for the award if they meet its other criteria.
Note that funds offered by offshore-domiciled companies require you to move money offshore, so your investments are subject to South African exchange control regulations and the South African tax regime that applies to offshore investments.
The funds themselves are subject to the regulatory requirements of the jurisdictions in which they operate. However, FSB-approved funds are aligned with the FSB’s regulatory standards.
Those domiciled in Europe are known as UCITS funds.
UCITS, which stands for the Undertakings for the Collective Investment of Transferable Securities, is, according to Investopedia, a regulatory framework of the European Commission that creates a harmonised regime throughout Europe for the management and sale of mutual funds (known in South Africa as unit trust funds).
This is the third year in a row that Nedgroup Investments has won this award, although on the previous two occasions it won it outright.
The manager’s international funds are constituted as UCITS and are domiciled in Ireland.
There were three qualifying offshore funds: the Global Equity Fund, which earned five PlexCrowns, and two multi-asset funds – the Global Flexible Fund (four PlexCrowns – down from five in the previous quarter) and Global Cautious Fund (four PlexCrowns).
The manager’s overall rating was 4.5 PlexCrowns.
Investec Asset Management
Many of Investec’s offshore funds are sub-funds of its Global Strategy Fund (GSF) based in Luxembourg.
Investec had seven qualifying funds of which three earned five PlexCrowns: the Global Managed Fund (which improved from four PlexCrowns in the previous quarter), GSF Global Strategic Managed Fund and GSF Global Value Equity Fund.
Three funds earned four PlexCrowns (one of which, the GSF Global Strategic Equity Fund, dropped a PlexCrown from the previous quarter), and one earned three PlexCrowns.
Its overall rating was 4.5 PlexCrowns.