Northstar Global Flexible Fund (USD)

This medium-high risk fund is ideal for investors who require long-term capital growth by investing in various asset classes, but predominantly in equity. The recommended investment time horizon is 7+ years.

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Fund Performance

Northstar Global Flexible Fund

Who should invest

This moderate to high risk fund is ideal for investors seeking meaningful growth of capital from a diversified portfolio of global equities and other assets. The fund’s aim is to outperform global flexible fund peers. An investment time horizon of at least 7 to 10 years is recommended.

Returns reflected below the chart are annualised. Source: Bloomberg, MorningStar and Northstar Asset Management.

Horizon:

  • 3 Years
  • 5 Years
  • 7 Years
  • 10 Years
  • SINCE INCEPTION
FUND RETURN

Benchmark Return

Outperformance

Benchmark Return

Outperformance

  • Invests in various asset classes worldwide.
  • A high conviction portfolio.
  • Provides maximum capital growth over the long-term.
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Invest offshore via Northstar

To invest in the Offshore fund directly through Northstar email admin@northstar.co.za or alternatively contact your financial advisor.

*It is the clients responsibility to ensure the SARS requirements to transfer funds offshore are met however Northstar can put you in contact with a Foreign Exchange Service Provider to assist with these requirements.

Speak to your financial advisor

Our unit trust range can be accessed via a number of platform providers. Please contact us for further information.

Requirements For This Fund

  • US$ 100 000
  • US$ 1 000
    • Certified Copy of both sides of ID Document with 3 specimen signatures (Certifier needs to state “signature belongs to ID Holder”).
    • Proof of Address (not older than 3 months) e.g. utility bill, rates, Telkom.
    • Proof of Banking details (not older than 3 months).
    • SARS document containing name and tax number.

     

  • Northstar’s funds are available via all the major local and offshore LISPS (Linked Investment Services Providers). Please contact us for further information on how to invest via a LISP should that be your preference.

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Further Reading

Commentary for the quarter ended 31 March 2024

Performance Review

The Northstar Global Flexible $ fund had another solid performance over the quarter under review.

It returned 5.82% versus the average of peers at 3.8%. Over the past year, the fund has gained 13.09% in dollars and the average peer 10.51%. Since its inception, it has returned 6.81% annualized versus 3.3% for its sector and it is ranked in the seventh percentile. Most pleasing is the funds’ consistency, it has remained in the top third of its peer group over every significant period since its inception. The peer group is the EAA USD Flexible Allocation sector.

Market Outlook and Portfolio Positioning

Despite this pleasing performance against flexible peers, our investment team has not found the markets easy to navigate. In fact, the equity component of the fund underperformed the MSCI World index over 12 months (MSCI World 25.6% versus equities in the fund 20.15%). Fortunately, for the past quarter, our equity returns are like the equity benchmark, at 8.29% versus the MSCI World at 8.97% and in March, the fund’s stocks outperformed the MSCI World index.

But rampant Tech (+12.4%) and Energy (+10%), both of which we have underweight to no exposure, as well as Communication services (+13%), where we are only slightly overweight, made beating the index difficult. In addition, our large overweight sector bests, in Healthcare (13.5% positive active bet) and Staples (7.6% positive active bet) underperformed the market for the quarter under review.

We contextualize the difficulty in beating the market in 2023 and early 2024 as follows. This is not the first time our equity portfolio has struggled against the index, the same happened in 2021 and for the same reason – momentum is the single largest factor driving the index – the momentum factor returned 20.1% in Q1 2024 and 36% over 12 months against Quality at 11.6% in 2024 and 33.6% over 12 months. Value as a factor has gained 7.5% this year and returned 18.8% over 12 months.  The Northstar philosophy is to own quality stocks at a reasonable price, the process folds quality and valuation into a compelling case of long-term outperformance. We will struggle in a raging momentum environment!

That said, our benchmark is 60% MSCI World and 40% GLAG. Over the quarter, we outperformed this passive comparison by almost 1%, but we acknowledge that over 12 months, we are lagging the benchmark, simply due to the equity component. Our fixed income team delivered attribution of 3.6% over the past year – good selection accounted for 0.4% of this, the rest came from being underweight fixed income (average weighting of 18.7% in the fund against the benchmark of 40%). For the quarter, bond exposure had been cut to 14% and attribution was 2.2% of which 0.5% came from selection. A 9.4% exposure to gold over the year also helped performance.

We have become increasingly defensively positioned in the fund. This is not a gut feel approach, but instead rather mechanically derived. We use our buy list’s discount to intrinsic value as a driver of equity exposure, when the buy list operates at a large discount (we increase equity exposure as our stocks are cheap), conversely, when the discount narrows, it implies that stocks are expensive, and we reduce risk asset exposure. The discount narrowed to the lower end of its historical range late last year and particularly in 2024, on this basis, equity exposure has been reduced.

Whilst our process is bottom-up and focused on that level, we do think that various macro indicators are worth noting. These, coincidentally corroborate our defensive positioning and include: Heightened geopolitical uncertainty both in the Middle East and in various countries facing national elections in 2024 – including the USA; High levels of confidence from market participants that a recession is a low probability outcome in the USA, despite such consensus being a contra cyclical indicator and the yield curve remaining inverted and finally; sticky inflation where base effects and energy prices are acting against softer readings.

We believe that the fund is extremely well positioned considering the present investment environment, its risk asset exposure is undervalued relative to the broader index and should outperform over time and its defensive positioning allows the management team to capitalize on any market correction, should this take place.

Quarterly Fund Video as at 31 March 2024

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About This Fund

Latest Allocation

  • Fixed Income
  • Cash
  • Equity
  • Alternatives
Management Date
01 June 2017
Sector
EAA Fund USD Flexible Allocation
Fund Size
US$ 82 million
Minimum Investment
US$ 1 000
Latest Distribution
Roll-up fund
INVESTMENT MANAGEMENT FEE
1.25 p.a. (VAT not applicable)
Risk Profile
Medium High
Allocation
Time Horizon
7 Years +
Regulation 28
No
Benchmark
EEA Fund USD Flexible Allocation
Fund Classification
EAA Fund USD Flexible Allocation