DID YOU KNOW? FOORD UNIT TRUSTS TURNS 20

The Foord Equity and Foord Balanced Funds launched on 1 September 2002. Previously, Foord had tried unsuccessfully to obtain a unit trust license for decades. One was finally awarded to the early empowerment joint venture between Foord Asset Management and AMB (African Merchant Bank) Holdings, known as AMB Foord Asset Management and AMB Foord Unit Trusts. The funds were called AMB Foord Equity Fund and AMB Foord Balanced Fund. Foord later bought out the AMB shareholding and on 30 September 2003 the names changed to Foord Unit Trusts, Foord Equity Fund and Foord Balanced Fund.

At launch, general equity funds dominated the unit trust universe in South Africa. We expected that Foord Equity Fund would grow quickly to become many times the size of Foord Balanced Fund, which was offered in Regulation 28-compliant form (complying with SA retirement fund asset spreading rules). However, financial advice risk was fast becoming prominent after the Financial Advisory and Intermediary Services (FAIS) Act became fully operational on 1 October 2004. Financial advisors and asset consultants started allocating monies to multi-asset funds, especially the so-called balanced funds.

Equity unit trust funds have not attracted much money in the last 15 years, but they seem to have grown in value mainly due to their legacy popularity and market growth. Multi-asset funds, notably the high-equity balanced funds and later the low-equity stable funds, became the behemoths of the investment industry.