Evolutionary Awards 2025 – Discovery: evolution in asset management

Category: Evolution in asset management

Describe your evolution:

Discovery Multi Balanced Fund: A Simple and Smart Approach to Consistent Returns

In light of recent changes to Regulation 28 offshore limits and heightened geopolitical tensions, returns within the corporate retirement fund industry have diverged significantly. To address these challenges, Discovery launched the Multi Balanced Fund—offering a unique strategy that balances simplicity with smart access to consistent investment returns.

Investment Philosophy

The Discovery Multi Balanced Fund is a multi-strategy, multi-asset solution that equally allocates capital across South Africa’s top-performing balanced funds. In partnership with RisCura, Discovery conducted comprehensive quantitative and qualitative analyses to ensure the fund achieves optimal style diversification. This approach combines the strengths of managers with proven scale and strong track records, aiming to deliver consistent performance across different market cycles. The fund’s fund-of-balanced-funds approach was intentionally chosen to give each underlying manager the freedom to express their asset class views and take high-conviction positions. This leads to a diversified allocation strategy and reduces the global risks that can be embedded in markets while still delivering alpha above the benchmark.

A key differentiator for the Discovery Multi Balanced Fund is its offshore approach. Each manager has access to a fully integrated offshore research team or the scale to implement direct offshore replication, enabling enhanced global market insights.

Fund Construction

The fund is composed of the following managers and strategies:

• Ninety One Balanced Fund (20%): Focuses on earnings revision at a reasonable starting valuation, with over 33 years of outperformance.
• M&G Balanced Fund (20%): A value-focused strategy with a strong quality overlay, boasting a 25-year track record of success.
• 10X Your Future (20%): An innovative active indexation strategy that keeps portfolio costs low while still generating significant returns.
• Ninety One Opportunity Fund (20%): A quality-focused fund with a 25+ year history of delivering exceptional absolute returns.
• Laurium & Abax (10%/10%) : Smaller boutique value managers that excel in alternative approaches, further enhancing diversification.

Each manager contributes a distinct style—value, quality and earnings revision—ensuring diversification across multiple investment philosophies. This diversification reduces correlation risks, allowing the fund to perform consistently across different market environments.

Simple Yet Smart

The Discovery Multi Balanced Fund combines simplicity with intelligent design, enabling investors to benefit from a diversified, well-managed portfolio without the complexity of managing multiple asset classes. It’s the ideal solution for those seeking consistent returns through a strategic, cost-efficient approach to retirement investing.

Whether you are starting to build your retirement savings or looking to optimise your portfolio, the Discovery Multi Balanced Fund offers a powerful blend of simplicity, diversification, and performance.

Describe the impact your evolution has had in response to its identified challenges and targeted outcomes.

Outcomes-Driven Performance

This investment strategy is designed to deliver solid, long-term outcomes for corporate retirement funds, which is why Discovery has appointed it as the default investment strategy for staff.

A back-test of returns demonstrates that the fund has outperformed its benchmark 100% of the time over rolling 3- and 5-year periods. Additionally, over rolling 1-year periods, the fund has outperformed the benchmark 97% of the time, validating the soundness of its construction and underlying philosophy.

Because this strategy uses an equal-weighted allocation, the portfolio remains static. Adjustments are only made in the event of strategy drift, or significant changes to the underlying manager teams that could introduce process or philosophy-related risks. As a result, the back-tested performance offers a reliable view of expected outcomes under this long-term, disciplined framework.

Cost-Efficiency

Cost is a critical factor in any investment solution. Backed by the Discovery brand, the Multi Balanced Fund benefits from a cost structure that ensures members access top-performing, style-diverse managers at a competitive rate. Most importantly, there are no performance fees loaded onto the portfolio, meaning members retain more of the returns generated by the fund.

Supporting Documentation >