Many foreign fund management companies have recently been courting South African investors. Ashburton, however, has been managing international investment portfolios on behalf of local investors since 1984, Prieur du Plessis writes in the second part of our series on international fund managers.
The company has three offices in South Africa and its investment specialists make regular visits to the country to present seminars to clients, potential investors and financial intermediaries.
Clients are also kept up to date with the performance of their investments through the fortnightly publication of price statistics in Business Report.
Ashburton (Jersey), established 15 years ago, is the principal investment management company of the Jersey General Group and is based in the Channel Islands. The group is totally independent and based entirely offshore.
Investment funds domiciled offshore are completely free from capital gains taxes, withholding taxes on dividends and interest payments.
Ashburton is a specialist in international investment and is responsible for the management and administration of funds exceeding US$1 billion. Clients comprise investment companies, corporate and personal trust funds and individuals.
In order to accommodate investors with differing risk tolerances and investment objectives, the company offers three investment services:
* the Cash and Fixed Income Service which aims to achieve returns in excess of cash deposits using bonds and cash;
* the Asset Management Service where the aim is consistent, above-average performance with low volatility from a balanced portfolio of bonds and equities; and
* the International Equity Service which invests in equities world-wide and aims at above-average capital appreciation through a more aggressive style of management.
When investing abroad, it is extremely important to ensure that all valuables (ie share and bond certificates and cash deposits) are in safekeeping with a reputable company. Funds earmarked for management by Ashburton are sent directly to either The Royal Bank of Scotland (Isle of Man) or Coutts (Jersey) who act as custodians. Coutts is a wholly-owned subsidiary of National Westminster, one of the world's largest banks.
Investors have a choice of investment method through which to invest in Ashburton's three services. They can opt for a personal portfolio, or units may be purchased in two ranges of unit trust products, comprising a total of seven unit trusts.
Ashburton Replica Portfolio offers a choice of four unit trusts, each of which retains and re-invests income (ie no dividends are paid). Alternatively, investors who prefer investment income to be distributed may purchase units in the three unit trusts making up Ashburton Global Funds.
The Ashburton unit trusts bear relatively low maximum initial charges of between three and four percent, and annual management fees ranging from 1,25 to 1,75 percent.
The International Equity Fund, the flagship of the Ashburton Global Funds category, has proven to be one of the top-performing offshore equity funds over both the short and long term.
Micropal performance tables for periods ended December 1996 ranked this fund second out of all 61 sterling-based offshore equity funds over the one-year period and first out of 34 funds over the five-year period. The fund has achieved a return of 21,1 percent a year over the past five years.
During the same five-year period the lower-risk balanced portfolio, Asset Management Service, achieved a return of 12,7 percent a year, while the Cash and Fixed Income Service yielded an annual return of 10,7 percent.
As far as the outlook for global financial markets is concerned, Ashburton maintains three long-term views at present: the dollar and pound will remain strong currencies; inflation will remain low; and multi-national companies, with strong balance sheets and the marketing capability to hold strong positions world-wide, should be the preferred equity investment.
* Prieur du Plessis is the chief executive of Plexus Asset Management.