Investments to be included in the portfolio will, apart from assets in liquid form, consist of participatory interests and other forms of participation in portfolios of collective investments schemes registered in South Africa and other similar schemes operated in territories with a regulatory environment which is to the satisfaction of the manager and trustee of a sufficient standard to provide investor protection at least equivalent to that in South Africa and which is consistent with the portfolio's primary objective, which is to target an annual return in excess of the total return of the MSCI All Country World Index, with a similar risk profile. The underlying portfolios will predominantly invest in financially sound equity securities, property shares and property related securities listed on exchanges, and assets in liquid form. The manager may include in the underlying portfolio derivatives and preference shares. To the extent that assets in the portfolio are exposed to exchange rate risk, the Manager may include listed and unlisted financial instruments for the exclusive purpose of hedging exchange rate risk subject to the conditions and limits stipulated by the Act. The manager shall have the maximum flexibility to vary assets between the various market and asset classes to reflect changing economic and market conditions.
In selecting securities for this portfolio, where possible, the manager shall seek to deliver long-term capital growth at an acceptable level of volatility.
The effective offshore exposure of the portfolio invested outside of the Republic of South Africa (including participatory interests in collective investment schemes, whether listed on an exchange or not, and other forms of participation in portfolios of collective investment schemes, financial instruments, and assets in liquid form) will always be above 80%.
The majority of the portfolio will be invested in participatory interests in collective investment schemes with an index tracking theme. The manager will have the flexibility to take advantage of short-term, as well as long-term events and themes within securities markets. Overall the portfolio seeks to provide investors with capital growth over the medium to long term at a reasonable level of volatility relative to the international equity markets. To that effect the portfolio places an emphasis on manager selection, sector allocation, geographical allowance and tactical asset allocation.