The 27four Shari'ah Balanced Fund of Funds follows a diversified approach to investing. The level of diversification is designed to deliver consistent and stable long-term investment performance and reduce the risk of investing in a single fund or asset class. The portfolio is a balanced fund that offers investors a single fund that combines both growth (equities) and income (through Sukuk, which are non-interest bearing Islamic bonds) objectives. By combining local and global equities (high risk) and Sukuk (low risk), we have been able to create a risk/return balance that provides capital appreciation, while avoiding excessive risk.

Risk profile

This investment option is best suited to investors with a moderate appetite for risk. The portfolio has a medium risk profile designed to deliver consistent and stable returns relative to the consumer price inflation over the medium-term. The portfolio will display average volatility, aimed for medium- to long-term capital growth and typically would have an actual equity exposure of between 40% and 65%.

Fund classification

Domestic - asset allocation - prudential medium equity

Benchmark

Average of the Category net of fees

Portfolio composition

Asset Class	Underlying Investment	Asset Allocation
SA Equities	SA equity exposure is accessed through SA’s top Shari’ah compliant equity fund managers.
Global Equities	Offshore equity exposure is accessed through some of the world’s leading Shari’ah compliant equity fund managers. This exposure is diversified across developed and emerging markets. By investing offshore, we are able to further diversify risk (ZAR hedge) and enhance our opportunity set for additional return.	40%-65% with global exposure limited to a maximum of 25%
Sukuk	Interest cannot be charged or paid on any financial transaction, as interest is deemed unlawful by Shari’ah. This means that traditional interest bearing fixed income and money market funds are unacceptable. Sukuk (meaning “certificates” in Arabic) are non-interest bearing instruments designed to replicate the payoff of fixed interest instruments. The Sukuk exposure comprises an optimal blend of Sukuk, with different fixed-term maturities (all less than 24 months), purchased from more than one investment grade bank. The introduction of Sukuk in a balanced portfolio allows for risk reduction and smoothing of long-term returns.	0%-60%