I have deliberately waited a year before writing this, the first fact sheet for the ValuGro Active Allocation Fund. Why? Quite simply to strongly emphasize that investors into this unit trust should be prepared to invest for at least a 1-year period.

I don't want to comment on monthly performance, or even quarterly - although I suspect fund investors will require quarterly fact sheets going forward. This fund is in a unit trust category that allows us to be 100% cash, 100% equities, 100% listed property, 100% bonds or any percentage mix of them. Furthermore the mix in the fund can be in any currency or invested in any country. We can even invest up to 20% in unit trusts. Because our investment range of choice is so wide, and because it is impossible to always perfectly time such optimal investment choices, we want to give our investment mix calls at least 12 months to perform before our investors assess us and our performance.

If you as a South African investor had invested 5 years ago in the US Dow Jones Industrial Index your rand return would be less than SA's cumulative inflation rate (CPIX) was over the 5-year period. You would thus have lost significantly value in real terms as a SA- based investor.

You would also have incurred real losses in SA terms had you invested then in any of US dollar cash (by "cash" I mean "money under the mattress"), US bank deposits, or bonds. The same would have applied had you invested in Euro or Pound cash, bank deposits or bonds.

Against our fund's performance benchmark of SA inflation (CPIX) + 4% your returns in any of the above asset classes would have looked even more ugly. We thus believe that the task of identifying both the right country to invest primarily in and its better performing asset classes is a difficult one and certainly requires at least a 1 year investment time horizon in order to show its potential benefits.

At present this fund is heavily invested in local JSE stocks. We are comfortable with this strategy going forward, but will be accumulating more foreign holdings as and when favorable opportunities arise.