STANLIB Multi-Manager NCIS Multi-Strategy Retail Hedge Fund MULTI-MANAGER
WE UNDERSTAND THAT INVESTING CAN BE A RISKY BUSINESS... so we have put together a hedge fund solution to lower your portfolio s exposure to risk independent of market cycles. Why should you consider adding a hedge fund to your portfolio? Most investors typically invest in a traditional manner placing money into shares and bonds. These types of investments have varying risk-return profiles but tend to respond similarly when market conditions are stressful. A hedge fund is an alternative investment that uses different strategies to generate attractive risk-adjusted returns. The benefit of a hedge fund investment is that it behaves differently to traditional investments. As an illustration, hedge funds may deliver positive returns when markets are down. Hedge fund managers are able to achieve this due to the wider tool set they have at their disposal (like short-selling), therefore the realised return of a hedge fund is more dependent on the skill of the hedge fund manager than on the general direction of the market. Including a hedge fund in your portfolio can be a good way to reduce the volatility of your portfolio returns over various market cycles and create a more stable and consistent return over the long term. What is the STANLIB Multi-Manager NCIS Multi-Strategy Retail Hedge Fund? Thanks to changes in regulation, hedge fund investments can now be offered to retail investors, as a Collective Investment Scheme (CIS). In response STANLIB Multi-Manager now offers its institutional quality hedge fund solution to all investors. The Fund is a multi-strategy hedge fund that aims to: Preserve capital over a rolling 12-month period Achieve a return of cash + 3% p.a. over a rolling three-year period with low dependence on the direction of the capital markets Manage volatility to levels lower than that the FTSE/JSE ALBI meaning you can expect low fluctuations in returns STANLIB Multi-Manager has partnered with credible and experienced service providers, Novare Collective Investment Schemes (NCIS) and Corion Capital, to ensure we offer clients a robust operating environment and investment proposition. PAGE 1
Why choose the STANLIB Multi-Manager NCIS Multi-Strategy Retail Hedge Fund? Well diversified across a number of underlying managers and hedge fund strategies. Offers daily liquidity which means you can access your money at any time and there is no minimum holding period. Established in 2012 on an institutional mandate, track record is over 5 years. Managed by an experienced specialist hedge fund team The investment process is underpinned by a proprietary system, which has been developed over the past 16 years. The team focuses on a rigorous quantitative analysis of the risk and return profile of underlying strategies, overlaid with a qualitative assessment of the investment management teams. This in-depth process has resulted in the Fund that has delivered consistent returns, with lower volatility than the FTSE/JSE All Bond Index and low correlation to traditional asset classes. The Fund is subject to the robust governance, compliance and oversight of STANLIB Multi- Manager and NCIS. Why the multi-strategy approach? Multi-strategy hedge funds use different investment strategies in the same asset pool to help reduce volatility through decreasing asset-class and single-strategy risks. The strategy allocation within the STANLIB Multi-Manager NCIS Multi-Strategy Retail Hedge Fund is: Long/Short Equity: 27% Seeks to minimise market exposure while profiting from stock gains in the long positions and price declines in the short positions. Multi-Strategy: 65% Allocates investment capital to a variety of investment strategies and potentially across several asset classes STANLIB Multi-Manager NCIS Multi-Strategy Retail Hedge Fund Strategy allocation Market Neutral: 5% Aims to benefit from mispricing, deliver positive returns from both the long and short stock selections and reduce risk from movements in the broad market, often through taking matching long and short positions in different stocks. Multi-Asset Low Equity: 2% Traditional CIS managed within the investment guidelines of the ASISA category South Africa Multi Asset Low Equity Money Market: 1% The Fund typically allocates to multiple managers within each strategy, reducing the overall concentration risk. Please see the Fund fact sheet for the latest underlying managers. PAGE 2
How has the Fund been performing? The Fund was launched as a CIS on 1 February 2018, however the assets have been managed on an institutional mandate since 1 December 2012. The historical performance of this mandate since inception is shown below. STANLIB Multi-Manager NCIS Multi-Strategy Retail Hedge Fund: Historical Performance Performance since the CIS inception together with risk statistics can be found in the Fund fact sheet on What are the risks associated with the Fund? The Fund is able to engage in transactions that involve counterparty exposure, short-selling, derivatives and other hedge fund activities. Risks associated with the fund activities include: Credit Liquidity Operational Regulatory Arising from exposures to counterparties Some of the underlying instruments may be illiquid Failure of systems and/ or personnel may result in losses Future regulatory changes (eg. legal, tax) could occur and may adversely affect the Fund Market Interest Rate Currency General movements in financial markets As a result of changes in the yield curve and other interest rate relationships Some of the underlying positions may be exposed to exchange rate fluctuations The risk profile of the Fund is therefore particularly different from that of a CIS holding traditional assets. Volatility is more dependent on the specific transactions within the Fund s strategies than on the movements in bond and equity markets. PAGE 3
How do I invest and what will it cost? How Fees Risk disclosures The Fund is available in the Classic Investment Plan on STANLIB Linked Investment Service Provider (LISP). If you are not yet a registered client of the LISP, please visit www.stanlib.com for the LISP application forms. Service fee of 1.7% p.a. (ex VAT) Performance fees are payable on some of the underlying mandates. For more information on fees consult the Fund fact sheet. Standard platform administration fees will apply for accessing the Fund via the LISP. Familiarise yourself with the risk disclosures of investing in a hedge fund - found in the terms and conditions of the LISP application forms. We recommend you make use of the services of your financial adviser before investing in this Fund. What support will I get over time? STANLIB Multi-Manager will publish a monthly Fund fact sheet to keep you up to date with performance, and as a Classic Investment Plan customer, you will receive a quarterly investor statement. For any additional queries, you may call your financial adviser. 17 Melrose Boulevard Melrose Arch 2196 PO Box 203 Melrose Arch 2076 T 0860 123 003 (SA only) T +27 (0)11 448 6000 E contact@stanlib.com W stanlibmultimanager.com GPS coordinates S 26.13433, E 028.06800 W Disclaimer As neither STANLIB Multi-Manager (Pty) Limited nor its representatives did a full needs analysis in respect of a particular investor, the investor understands that there may be limitations on the appropriateness of any information in this document with regard to the investor s unique objectives, financial situation and particular needs. The information and content of this document are intended to be for information purposes only and STANLIB does not guarantee the suitability or potential value of any information contained herein. STANLIB Multi-Manager (Pty) Limited does not expressly or by implication propose that the products or services offered in this document are appropriate to the particular investment objectives or needs of any existing or prospective client. Potential investors are advised to seek independent advice from an authorized financial adviser in this regard. Additional Information Additional information such as brochures, application forms, annual or quarterly reports, can be obtained from www.stanlib.com or STANLIB Multi-Manager (Pty) Limited Reg. No. 1999/012566/07. An authorised Financial Services Provider in terms of the FAIS Act, 2002 (Licence No. 26/10/763) PAGE 4