The Coronation Balanced Defensive Fund was developed to protect cash over the course of a year while simultaneously attempting to provide investors with long-term gains. The fund is safer than unit trusts that primarily invest in equities and offers low to moderate risk to investors. For conservative investors who want to receive income over a long period of time, this investment option is perfect.
The fund was first introduced on February 1, 2007, just a few months before the global financial crisis of 2008. With the exception of 2020, when the Covid-19 epidemic broke off, the fund has managed to surpass its assigned benchmark after initially being outperformed by it.
The fund has so far demonstrated that it is unstable during times of global shakedowns. The fund is still to develop before a more thorough analysis can be conducted. Since 2022, the fund has just marginally outperformed its chosen benchmark (12.30 %).
The fund’s investment portfolio can be used to track the growth of the fund. The majority of the investments in the Coronation Balanced Defensive Fund are bonds with a guaranteed interest. As a result, the fund is less erratic than one that invests more in stocks or real estate.
The fund is undoubtedly for a conservative investor who wants to generate interest without taking a significant financial risk. Investment returns will be modest, but capital exposure won’t be as great.
Continue reading the article to learn more about the fund before making an investment. More information on the fund is provided below.
Coronation Balanced defensive fund summary
The unit trust Coronation Balanced fund has a low to moderate risk. The fund’s performance is stable, and it prioritizes capital preservation while providing investors with a profit. Investors are encouraged to make investments for at least 3 months or longer.
There is a minimum threshold for contributions to the fund. For debit order investments, the minimum monthly contribution to the fund is R500.00. If someone wants to make a lump-sum investment, they must put at least R5,000 into the fund. You can finance the account using one of the two methods of contribution.
Since its creation on February 1st, 2007, the fund has expanded in size. The fund was valued at R31.25 billion as of 2022, and each unit cost R2.05 to purchase. The fund has increased in value by 269.3 % since its start. That is an increase of 8.9 % on average.
The fund’s growth has outpaced its established benchmark, which had a growth of 257 % during the same time span. The benchmark for the Coronation Balanced Fund has been established as CPI + 3%. The benchmark states that the fund aspires to outperform inflation and grow the fund by 3% annually, which it has succeeded in doing.
The fund makes investments in a variety of assets to meet its goals. The fund invests in the following assets:
- Local equities, which account for 24.30% of the fund portfolio,
- Local real estate which accounts for 2.3% of the fund portfolio,
- International equities, which account for 15.90% of the fund,
- Local bonds, which account for 43.80% of the fund,
- Local cash which accounts for 3.80% of the fund portfolio,
- Foreign real estate which accounts for 0.1% of the fund portfolio,
- Local communities, which account for 2% of the fund portfolio,
- Local currency futures, which account for 1% of the fund portfolio,
- Foreign commodities, which account for 0.2% of the fund, and
- Foreign cash, which accounts for 3.3% of the fund portfolio
The fund makes smart investments that help it achieve its goals. The fund makes investments in ventures that are regarded as excellent investments and occasionally buys and sells equity in businesses. The top 10 investments made by the fund are presented below to help you understand it better. The balanced defensive fund can be applied for online.
Top 10 Holdings by the Coronation Balanced defensive fund
| # | Company | Fund percentage |
| 1 | Anglo-American Plc | 2.5% |
| 2 | British American Tobacco Plc | 2% |
| 3 | FirstRand limited | 1.7% |
| 4 | Prosus NV | 1.5% |
| 5 | Nedbank Ltd | 1.1% |
| 6 | Growthpoint Properties ltd | 1% |
| 7 | Compagnie Financiere Richemont SA | 0.9% |
| 8 | MTN group Ltd | 0.8% |
| 9 | Standard Bank of South Africa ltd | 0.8% |
| 10 | Exxaro Resources Ltd | 0.8% |
Advantages of the Coronation Balanced defensive fund
- The fund is Regulation 28 compliant. Investments in retirement plans are permissible to invest in the fund.
- The minimum contribution to the account is low.
- Investments for retirement have tax advantages when investing in the fund.
- The fund is a low-risk investment, therefore, capital is protected to a certain maximum.
- Anyone can invest in the account by using the right investment vehicle.
- The fund is able to outperform its set benchmark.
- The fund can be purchased remotely.
Disadvantages of the Coronation Balanced defensive fund
- As much as the fund provides a low-risk investment, it is not 100% secure.
- Capital can decrease from time to time which can affect short-term investments.
Conclusion
For a very short period of time, the Coronation Balanced defensive fund has been able to add value to the fund. Investors will soon be able to accurately gauge the fund’s success because it is still growing. When investing in the fund, it’s crucial to have a medium- to long-term perspective on investing if you want to see big returns on your money.
