Southern Charter scoops Morningstar Award


Southern Charter, the investment management firm which believes Asset Allocation Drives Everything, was awarded on 19 February 2014,top accolades the Morningstar Awards held in Cape Town, South Africa.

The firm was runner-up in the Best Fund House: Small Range category and won the Best Aggressive Allocation Fund award for the Southern Charter MET Growth Fund.

This was the third consecutive year that the firm was nominated and won at the 2014 Morningstar awards.

Mark Thompson, investment strategist and co-fund manager of the Southern Charter funds, says a focused asset-allocation process has been the key to the consistent strong performance of its funds.

“Research indicates that asset allocation produces 92% of the return, with only 2% resulting from market timing and 6% from stock picking. In order to deliver returns we actively manage the tactical asset allocation of our funds based on the relative valuation of the major asset classes combined with in-depth analysis of the investment environment. Asset allocation is key in our current economic climate, and we expect to see continued flows into asset allocation funds through the course of the year, based on the economic outlook for 2014,” says Thompson.

Thompson further explains that the award-winning Southern Charter MET Growth Fund aims to provide investors with capital growth of 7% above inflation over the longer term by investing in a combination of asset classes including local and international equities, fixed interest, property and cash.

“As the Fund has a high allocation in growth assets, it is ideal for investors with a long investment horizon, who seek capital growth and who are at least 10 years from retirement. The annualised return of the fund over the last five years is an impressive 17.2%.”

According to Ursula Maritz, Chief Investment Officer at Southern Charter, “Each asset class has different characteristics, but each is necessary to create a well-diversified portfolio. In addition, by diversifying across managers, portfolios can benefit from managers different investment style, experience and flair, further ehancing potential returns and reducing risk.”

Southern Charter’s Growth, Balanced and Defensive funds have delivered exceptional performance. The annualised growth rate for the five year period ending 31 December 2013 for the funds noted above was 17.2%, 15.5% and 12.1% per annum respectively.

The criteria for a Morningstar award is delivering the best investment performance at the lowest risk to the investor’s capital. Winners are selected using a quantitative methodology developed by Morningstar that considers the one and three year performance history of all eligible funds, and adjusts returns for risk using Morningstar Risk. The Morningstar relative risk-adjusted methodology is regarded as the most stringent and fairest measure of successful fund performance.

“Keep investment simple by starting with the end in mind, decide how much risk you are comfortable with and set your investment objective accordingly, making sure that your portfolio is adequately diversified and in line with your risk expectation. Strive to achieve the highest return at an acceptable level of risk over time and consider all asset classes available in your investment universe,” concludes Thompson.


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