{"id":685457,"date":"2023-05-08T08:39:41","date_gmt":"2023-05-08T06:39:41","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=685457"},"modified":"2023-06-15T07:18:23","modified_gmt":"2023-06-15T05:18:23","slug":"5-benefits-of-balanced-funds-with-investment-specialist-amika-pillay","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/industry-news\/685457\/5-benefits-of-balanced-funds-with-investment-specialist-amika-pillay\/","title":{"rendered":"5 Benefits of Balanced Funds with investment specialist Amika Pillay"},"content":{"rendered":"<p>If you want to invest for retirement or grow your savings over a decade or more, consider investing in a Balanced Fund.<\/p>\n<p>Balanced Funds make the most important pre-retirement investment decisions on investors\u2019 behalf.\u00a0 It is also clear that allowing a skilled fund manager to actively manage your portfolio in response to dynamic market environments can add significant value to your investment over time.<\/p>\n<p><a href=\"https:\/\/www.coronation.com\/en-za\/personal\/latest-insights\/personal-finance\/the-5-benefits-of-balanced-fundsyou-need-to-know-now-march-2023\/?utm_source=Businesstech&amp;utm_medium=paid&amp;utm_campaign=frontrow2023q2&amp;utm_term=retail&amp;utm_content=-balanced-funds#\" target=\"_blank\" rel=\"noopener\"><strong>Learn more by watching the <\/strong><strong>full video here<\/strong><\/a>, where we unpack the five key benefits of these funds and what makes them the most popular category in the industry.<\/p>\n<p><iframe loading=\"lazy\" title=\"YouTube video player\" src=\"https:\/\/www.youtube.com\/embed\/cLRDhC3qJE4\" width=\"640\" height=\"360\" frameborder=\"0\" allowfullscreen=\"allowfullscreen\"><span data-mce-type=\"bookmark\" style=\"display: inline-block; width: 0px; overflow: hidden; line-height: 0;\" class=\"mce_SELRES_start\">\ufeff<\/span><\/iframe><\/p>\n<p>A balanced fund is characterised by its diversification across asset classes, giving it the potential to <strong>reduce overall risk<\/strong> through exposure to different asset classes and <strong>enhance returns<\/strong> by broadening exposure to a more significant opportunity set.<\/p>\n<p>Because the rand is a volatile currency that strengthens or weakens meaningfully over relatively short periods, balanced funds benefit long-term investors because they give<strong> access to international markets through<\/strong> a blended portfolio of local and offshore assets.<\/p>\n<p>The international exposure also offers investors access to opportunities in industries that may not have a strong presence in the local market as well as to a much wider set of quality businesses with attractive earnings prospects within those industries.<\/p>\n<p>What&#8217;s more, quantitative research shows that the optimal level of offshore exposure is around 40%, and with balanced funds, investors can outsource the responsibility to maintain appropriate levels of offshore exposure to the portfolio managers on their behalf.<\/p>\n<p>Balanced funds also allow portfolio managers to increase and decrease exposure to the various asset classes in response to their relative attractiveness.<\/p>\n<p>The value our skilled fund managers add to your investment over time makes this one of the most compelling reasons to choose Coronation as your investment partner.<\/p>\n<p><iframe loading=\"lazy\" title=\"YouTube video player\" src=\"https:\/\/www.youtube.com\/embed\/WcQBQrZ8ndg\" width=\"640\" height=\"360\" frameborder=\"0\" allowfullscreen=\"allowfullscreen\"><span data-mce-type=\"bookmark\" style=\"display: inline-block; width: 0px; overflow: hidden; line-height: 0;\" class=\"mce_SELRES_start\">\ufeff<\/span><\/iframe><\/p>\n<p>The following example of the total equity weighting over time within Coronation Balanced Plus Fund best demonstrates this benefit.<\/p>\n<p>From 2013 \u2013 2015, Coronation believed SA equities were expensive and offered limited upside. As such, the fund held just over 30% in SA equity, with a total equity exposure of approximately 55% (see Figure 1).<\/p>\n<div id=\"attachment_349099\" style=\"width: 651px\" class=\"wp-caption aligncenter\"><a  data-lightbox=\"post-image\" href=\"https:\/\/test.businesstech.co.za\/news\/wp-content\/uploads\/2023\/05\/Coronation-1.png\"><img loading=\"lazy\" decoding=\"async\" aria-describedby=\"caption-attachment-349099\" class=\"wp-image-349099\" src=\"https:\/\/test.businesstech.co.za\/news\/wp-content\/uploads\/2023\/05\/Coronation-1.png\" alt=\"\" width=\"641\" height=\"360\" \/><\/a><p id=\"caption-attachment-349099\" class=\"wp-caption-text\">Figure 1: Adjusting the total equity exposure on your behalf in Coronation Balanced Plus Fund 2013 \u2013 2015 focus.<\/p><\/div>\n<p>Conversely, when prices are low and upside is high, the fund holds a much higher exposure to equities. At the end of 2022 (see Figure 2), the fund had the maximum allocation to equities, which is 75%.<\/p>\n<div id=\"attachment_349098\" style=\"width: 651px\" class=\"wp-caption aligncenter\"><a  data-lightbox=\"post-image\" href=\"https:\/\/test.businesstech.co.za\/news\/wp-content\/uploads\/2023\/05\/Coronation-2.png\"><img loading=\"lazy\" decoding=\"async\" aria-describedby=\"caption-attachment-349098\" class=\"wp-image-349098\" src=\"https:\/\/test.businesstech.co.za\/news\/wp-content\/uploads\/2023\/05\/Coronation-2.png\" alt=\"\" width=\"641\" height=\"360\" \/><\/a><p id=\"caption-attachment-349098\" class=\"wp-caption-text\">Figure 2: Adjusting the total equity exposure on your behalf in Coronation Balanced Plus Fund 2022 focus.<\/p><\/div>\n<p>Another benefit is asset allocation, which is the balanced fund&#8217;s ability to allow for optimally blending higher-risk growth assets with lower-risk assets, balancing risk and reward for investors, and, if done successfully, is a substantial contributor to fund performance over time.<\/p>\n<p><a href=\"https:\/\/www.coronation.com\/en-za\/personal\/latest-insights\/personal-finance\/the-5-benefits-of-balanced-fundsyou-need-to-know-now-march-2023\/?utm_source=Businesstech&amp;utm_medium=paid&amp;utm_campaign=frontrow2023q2&amp;utm_term=retail&amp;utm_content=-balanced-funds#\" target=\"_blank\" rel=\"noopener\"><strong>Watch the video now<\/strong><\/a> to see how if you invested R100 000 in the fund at inception just over 25 years ago, your money would have grown to just under R3 million.<\/p>\n<p><em>Coronation is an authorised financial services provider.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"<p>If you want to invest for retirement or grow your savings over a decade or more, consider investing in a Balanced Fund. <\/p>\n","protected":false},"author":57,"featured_media":685471,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[10459],"tags":[10917],"class_list":["post-685457","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-industry-news","tag-coronation"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/685457","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/57"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=685457"}],"version-history":[{"count":3,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/685457\/revisions"}],"predecessor-version":[{"id":696457,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/685457\/revisions\/696457"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/685471"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=685457"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=685457"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=685457"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}