In an investment landscape often marked by uncertainty and volatility, the “boring” balanced fund still remains a compelling choice for investors seeking both growth and risk management. According to the Alexforbes Large Manager Watch survey, approximately R1 trillion of institutional clients’ assets find a home in these solutions which provide investors with access to dynamic asset allocation and security selection expertise of fund managers. The Association for Savings and Investment South Africa (ASISA) recently reported that 50% of unit trust savings are in multi-asset funds, further underlining their popularity amongst investors and advisers.
Market-leading returns at lower risk
The Perpetua Investment Managers team has more than a decade of experience managing the Perpetua Domestic Balanced Fund that not only delivers strong long-term capital growth, but does so with a disciplined approach to risk, ensuring that investors achieve meaningful real returns while minimising the risk of capital loss. This can be observed from an analysis of the Fund’s return over the past 3 years relative to the volatility of returns (a common measurement of absolute risk). The Perpetua Domestic Balanced Fund has the 2nd highest return relative to the peer group over this period while exhibiting one of the lowest risk profiles.
Figure 1: 3 year annualised returns vs risk of SA Balanced Fund managers
Source: Alexforbes Large Manager Watch BIV survey, January 2025, Perpetua
Note: Each investment manager peer included in this graph has been assigned a letter which is used consistently throughout the article
The power of a balanced approach
Balanced funds provide a diversified investment solution, incorporating multiple asset classes such as equities, fixed income, commodities, and property. This blend allows for an optimal mix of growth potential and downside protection, making them an effective choice for long-term investors, retirement savers, and institutions looking for steady, inflation-beating returns.
Perpetua’s Balanced Fund is designed with a clear objective: to achieve long-term returns above SA CPI+5% while adhering to Regulation 28 of the South African Pension Funds Act. This means that our portfolio is constructed with careful consideration of asset class risk, ensuring a well-diversified exposure that serves investors across different market cycles. While this performance objective is our key deliverable, we remain equally conscious of the performance of peer balanced managers ensuring we are not only able to keep pace, but exceed peer returns at lower levels or risk and volatility.
As evidenced by our recent performance, Perpetua’s Domestic Balanced Fund has delivered strong risk-adjusted returns compared to institutional peers (sourced from the Alexforbes Large Manager Watch survey). Our ability to actively manage downside risk while capturing growth opportunities has allowed us to achieve consistency in performance — a critical factor for investors seeking stability and compounding returns over time.
Figure 2: Perpetua Domestic Balanced Fund vs peer group
Source: Alexforbes Large Manager Watch BIV survey, January 2025, Perpetua
Perpetua: embracing a thoughtful and insightful investment approach
Our investment team applies a dual approach to multi-asset class portfolio construction:
- Top-down asset allocation: We assess macroeconomic trends, market cycles, and relative asset class valuations to determine the optimal allocation across equities, bonds, cash, and commodities. This dynamic allocation enables us to be nimble, taking advantage of opportunities across asset classes while managing risk prudently.
- Bottom-up fundamental research: Within each asset class, our team conducts rigorous, independent research to identify high-quality investment opportunities. Whether selecting equities, fixed income instruments or commodities, we focus on intrinsic value, risk-adjusted return potential, and long-term sustainability.
This combination of robust macro-driven asset allocation and meticulous fundamental research allows us to construct a portfolio that is both resilient and positioned for long-term success.
What sets Perpetua apart?
Our ability to be agile in asset allocation and construct differentiated portfolios positions us uniquely within the multi-asset investment landscape.
Why consider Perpetua’s Domestic Balanced Fund?
While the asset management industry is filled with large incumbents, we believe our boutique nature is a core strength rather than a limitation. Now in our 13th year of managing clients’ funds, Perpetua is proven to be solid, thoughtful, and insightful, combining deep research with a disciplined, long-term focus.
For investors looking to build a resilient portfolio that can weather different market conditions, Perpetua’s Domestic Balanced Fund is a sound choice. Our strategic blend of asset classes and ability to construct differentiated portfolios, our risk-conscious approach, and agility to make thoughtful dynamic adjustments set us apart in the multi-asset space.
At Perpetua, we are committed to delivering investment solutions that are not only fundamentally sound but also tailored to meet the evolving needs of investors. Because in investing, as in life, balance matters.
We invite investors, financial advisors, and institutions to reach out to Kevin Dantu (kevind@perpetua.co.za) or Vuyo Mtuzula (vuyo@perpetua.co.za) for more information on how Perpetua can be a valuable addition to your multi-asset portfolio selection.