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AThe Seed Global Fund is a UCITS (Undertaking for Collective Investment in Transferable Securities) fund. UCITS legislation was introduced over 20 years ago and is recognised as the European Union gold standard for investment funds. The legislation, similar to local CIS, seeks the highest levels of investor protection through regulating who can manage UCITS funds and how these funds can be managed.

An advantage of the UCITS legislation (again similar to local CIS) is that any transaction within a fund doesn’t trigger a tax event (CGT or income tax). Seed can therefore make changes to the Seed Global Fund’s construct (manager or asset allocation) without impacting clients’ net of tax returns. With tax, particularly CGT, expected to become more of a burden over time, the impact of this efficiency cannot be ignored and will become a bigger component in an investor’s decision-making process.

Fund Construction

The Seed Global Fund is able to invest into both funds and individual securities, but for now is mostly using funds as the building blocks. With the pooling of many investors into the Seed Global Fund we are often able to negotiate lower fees when compared to individual investors investing into the funds which is another benefit of investing into the Fund. The Seed Global Fund is also able to invest into Funds/structures that aren’t available to the average investor and as such provide investors with an enhanced risk/return profile.

The Seed Global Fund, like our local unit trusts, has a long term strategic asset allocation that we expect will produce the desired return with the lowest possible risk. The Fund’s benchmark is USD Cash (US Libor) + 3% pa. We then perform research to determine whether any asset classes / regions should be specifically over or under weighted.

Late in 2017, following on from due diligence in their London office, we included the Lindsell Train Global Equity fund, replacing long time holding Investec Global Franchise.

Chart 1 : Our Manager Research Process has Resulted in the Top 5 Holdings

Source : Seed Investments (31/01/2018)

Fund Performance

The Fund’s performance since inception has been materially ahead of its benchmark on the back of strong equity markets, a large overweight to global equities and excellent manager selection (managers outperforming their global equity benchmarks). Importantly, none of the underlying investments have delivered a negative return.

While we do expect returns to moderate going forward, we are pleased that the Fund’s performance has been in the top quartile when compared to over 240 funds in Morningstar’s EAA Fund USD Flexible Allocation category.

Chart 2 : Fund Performance versus Benchmark and Peers

Source : Seed Investments (31/01/2018)

Should you have any further questions, please do not hesitate to contact us. Where appropriate, we will advise clients to invest in the Seed Global Fund. We are excited that we are finally able to bring this offering to our clients!

Kind regards,

Ian de Lange

Download Fund Fact Sheet   Download Fund Overview

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