The Best Balanced Fund in South Africa: ? It Depends When You Ask

Interview conducted by Carl-Peter Lehmann with Steven Hall. Performance data referenced is to 31 May 2026, sourced from Morningstar/ASISA.

The Origin Story: From a Reg 28 Pivot to a Boutique

When balanced funds shifted from investors self-managing their Regulation 28 exposure to trustees carrying that responsibility, a small opening appeared. “In 2013 there was a request to have a balanced fund for the Prescient Provident Fund,” David Hansford told us. “That’s where the managed fund started.” Two years later he bought the FSP from Prescient Securities. At the time, both Long Beach funds together managed around R35 million. By the time we spoke, they sat at roughly R650 million — still boutique, but with a track record that had punched well above its weight.

“My investment philosophy, in a few words, is: buy great companies and hold on.” — David Hansford

Further reading: Balanced funds for retirement annuity investment, and the top performers

One Mind, One Mandate

Naming an asset manager is harder than it looks. Hansford lives in Kommetjie, a short walk from the surf at Long Beach. “Another manager once told me he named his firm after his street. I thought, well, I live next to Long Beach — that’s a pretty good name.” The structure is as lean as the brand is simple: Hansford is key individual and portfolio manager for both funds, Prescient handles the manco and administration, and Moonstone manages compliance. On the obvious question — what happens if something happens to him — the funds roll into Prescient Fund Services and a large institutional manager, an arrangement set up so clients avoid any liquidity risk even if everyone wanted out at once.

Plenty of funds are run by committee. Long Beach is not, and Hansford argues that is the point. “Because it’s both my business and I manage the funds, I’ve consistently tried to make the best decisions for investors, not the business,” he said. In larger firms, especially through rough patches, “there can be a tendency to manage the fund for business purposes rather than investment purposes — hugging benchmarks, taking less risk than the mandate allows. I try to do the opposite.”

That conviction shows up in clear positioning. In the balanced fund, offshore exposure sits near the Regulation 28 maximum, equity exposure runs toward the top of the limit, and the mandate is unambiguously for accumulators rather than retirees drawing an income.

“We unashamedly say we’re looking to maximise growth in the balanced fund for accumulating investors.” — David Hansford

The Approach: Buy Great, Then Actually Hold

Everything pivots on one idea: own businesses with exceptional economics, and let compounding do the work. Hansford’s checklist reads like a quality investor’s cheat sheet — capital-light models, large addressable markets, recurring small-ticket revenue, and a preference for business-to-consumer over business-to-business, where customer relationships tend to be stickier.

He is wary of one-number valuation calls. “People get hung up on the current price-to-earnings ratio. But good companies often look expensive and bad companies often look cheap. I think in valuation bands, not checkpoints.” The harder discipline, he says, is not buying but holding.

“One of my biggest mistakes over the years was selling too early. If I have a good idea, I like to let it run. I’ll sell when something gets egregiously expensive — not just because it’s 10 or 20% above my estimate of fair value.” — David Hansford

Two long-held names illustrate the trade-off. Shopify roared in 2020 and 2021, then was written off as a “COVID winner” — even as revenue growth re-accelerated, the product moved upmarket into enterprise clients, and new business lines opened up. Cloudflare sits in the same capital-light, recurring-revenue sweet spot. Both added meaningfully to the fund’s volatility — flattering returns in the good years and hurting in the bad ones. That is the deal a fund like this makes with its investors, and Hansford is candid about it.

His research process is refreshingly human in an age of quant dashboards: read widely, and use the products. “Peter Lynch used to talk about going to the mall for ideas. A common theme in our portfolios is that you and I probably interact with a lot of the companies we own.”

Consider reading: Our interview with Granate Asset Management, another top South African boutique

Why Run Near the Offshore Limit

The reason is opportunity set. “South Africa’s economy has productivity constraints and is in a low-growth trap absent structural reform,” Hansford said. “There may be good trading opportunities locally, but sustained long-term growth is easier to find outside South Africa.” Hence the balanced fund’s offshore stance near the cap whenever regulations allow.

Is that more volatile? Yes — by design. The fund states the objective upfront: it is built for accumulators who want growth, not retirees who need a smoother ride. Hold that thought, because it is exactly what explains the past year.

Further reading: Investing offshore as a South African, including the top-performing offshore funds

Nine Months Is a Long Time in Investing

When we ran this interview, Long Beach Managed was the number-one balanced fund in South Africa over one, three and ten years. The picture to 31 May 2026 is almost unrecognisable. Over the most recent twelve months the fund returned roughly −9%, against a category median of about +16% — a gap of some 25 percentage points that leaves it near the very bottom of the roughly 235-fund SA Multi-Asset High Equity category. The three and five-year numbers have followed it down to around 9.7% and 8.2% per annum, both now below the category median, where a year earlier the fund led the table outright.

And yet here is the detail that matters most. Over seven years, the same fund still sits inside the top 30 of its category, at roughly 9.3% per annum — comfortably top quartile. How can a fund be near the bottom over one year and near the top over seven? Because the seven-year window still captures the 2020–21 growth surge that suited this fund perfectly — the very years the shorter windows have now rolled past. Nothing about the fund changed. The measurement window did.

It would be easy to read the recent numbers as a verdict on the manager. They are not. They are a verdict on a style — and on the year the market just had. The period we wrote about was dominated by global growth shares and a weak rand, both of which suited a fund running near the offshore limit with a quality-growth tilt. The twelve months that followed did close to the opposite: South African assets had a strong run, the rand firmed, and value-oriented domestic managers came back into favour. The same rotation that vindicated patient value houses like Allan Gray and PSG worked directly against a max-offshore growth book.

In other words, the fund did what it told you it would do. Hansford was explicit that the strategy accepts higher volatility in exchange for higher long-term growth, that it is built for accumulators, and that holdings like Shopify and Cloudflare amplify the swings in both directions. A sharp give-back after a sharp run is not the strategy breaking. It is the strategy being itself, in a market that briefly stopped rewarding it.

None of this tells you whether the fund is a buy or a sell today — that depends entirely on your goals, your timeframe, and what else you already own. What it does illustrate is the trap of judging a high-conviction, growth-tilted fund over a single hard year. A fund built to be held for a decade has to be judged over something closer to a decade.

So What Is the Best Balanced Fund Right Now?

If you simply re-ran the league table to 31 May 2026, a different set of names would sit at the top — and tellingly, they got there by very different routes. Below are some of the standout balanced funds on five-year annualised performance, all within the same SA Multi-Asset High Equity peer group of roughly 189 funds.

Based on Morningstar/ASISA performance data to 31 May 2026. Five-year annualised returns, primary retail class. Past performance is not a reliable indicator of future results.

Look closely and the interesting thing is not who is first. It is that a contrarian value house, a quality-focused boutique, a patient long-term value manager, and a low-cost index fund all landed in roughly the same place over five years — having taken almost opposite paths to get there. Each one has had its bad stretch. They simply had them at different times.

For the full picture of how these managers stack up across every category, see our 2026 ranking of South Africa’s best asset managers.

The Real Lesson: Blend Styles, Don’t Chase Winners

Here is the part that matters more than any ranking. Different investment styles win at different times. Growth and offshore-heavy funds lead in some years; value and domestically-tilted funds lead in others. Nobody reliably predicts the handover, and the investor who chases last year’s leader tends to buy each style right as it is about to underperform.

The way through is not to find the single best balanced fund. It is to combine funds whose good and bad years do not line up. When you hold complementary styles together — a growth-tilted manager alongside a value-tilted one, active alongside a low-cost index core — the peaks and troughs partly offset. The blended journey is smoother than any single fund’s, and a smoother journey is one investors are far more likely to stay invested through. That, not a marginally higher headline return, is usually what determines whether a real portfolio actually compounds.

It also reframes a fund like Long Beach correctly. As a standalone “best fund” bet, it is hostage to whether its style is in or out of favour. As one deliberately chosen, growth-oriented component of a properly diversified portfolio — sized appropriately, paired with managers who zig when it zags — it can do exactly the job it is built for. The question was never “is this the best fund?” It was always “what is the right blend for this investor’s goal and timeframe?”

This is where independent, fee-only advice earns its keep. We are not tied to any manager or product, which means we can build a portfolio from the genuine best-of-breed across styles — and, just as importantly, hold our nerve when one of those styles is having its inevitable bad year.

For full disclosure: Long Beach is held in one or two individual client portfolios where it suits the mandate, but it is not part of our model portfolios. We have no commercial relationship with the manager. This piece reflects our genuine view of an approach we found worth understanding — not a recommendation.