The best of both worlds

Finweek English Edition - - Unittrusts -

are talk­ing down the prospects for eq­uity mar­kets over the next two years, one sec­tor that’s open­ing up is the fixed in­come mar­ket.

One fund to con­sider is the In­vestec Di­ver­si­fied In­come Fund, which holds a mix­ture of South African prop­erty, lo­cal govern­ment and cor­po­rate bonds and a mix­ture of do­mes­tic and in­ter­na­tional unit trusts.

“Credit is our favourite fixed in­come in­stru­ment, not only be­cause you’re earn­ing a very at­trac­tive spread of any­thing from 1,5% to 2% above Govern­ment bond yields, but you are get­ting that at rel­a­tively low risk, as the com­pa­nies are well-man­aged, recog­nised busi­nesses with strong brand names,” says An­dré Roux, co-head of global fixed in­come at In­vestec As­set Man­age­ment.

Asked why in­vestors would con­sider the Di­ver­si­fied In­come Fund, Roux said: “What makes the In­vestec Di­ver­si­fied Fund unique and un­usual is that it ac­cesses the best fixed in­come op­por­tu­ni­ties in both do­mes­tic and off­shore mar­kets. Given our glob­ally in­te­grated fixed in­come team op­er­at­ing from London and Cape Town, we thought it made a lot of sense to cre­ate a fund where South African in­vestors are availed of the best of both worlds.”

On top of this, the off­shore al­lo­ca­tion of the fund is hedged, mean­ing that in­vestors should not lose cap­i­tal if the rand strength­ens.

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