Fund manager

Finweek English Edition - - FUND IN FOCUS - AS A MULTI-MAN­AGED FUND,

its uses two ex­ter­nal man­agers – in the form of Pre­scient and Coro­na­tion – who man­age the money on be­half of in­vestors. “The in­vest­ment man­agers have ab­so­lute re­turn tar­gets writ­ten into the man­date,” says James. This means the re­turns must ex­ceed 2.5% per an­num above the con­sumer price in­dex (CPI), re­gard­less of mar­ket con­di­tions. With CPI cur­rently at 4%, this would im­ply the fund must achieve re­turns of 6.5% in the cur­rent pe­riod, some­thing that it seems to be do­ing quite eas­ily at the mo­ment.

In terms of the types of in­stru­ments the man­agers can in­vest in, James says that “th­ese have to be bonds is­sued by the gov­ern­ment or cor­po­rates that meet cer­tain credit cri­te­ria, and in or­der to achieve the re­turns we want, the fund is re­stricted to hold­ing a max­i­mum of 5% in cash”.

You can see the way the fund has been po­si­tioned by look­ing at the ac­com­pa­ny­ing ta­ble en­ti­tled Du­ra­tion al­lo­ca­tion, which shows the dif­fer­ent ma­tu­ri­ties of in­stru­ments in the fund. The fund is over­weight ex­po­sure in the one- to three-year cat­e­gory. “Ba­si­cally, we think in­fla­tion is go­ing to be rel­a­tively sub­dued and in­ter­est rates flat for the fore­see­able fu­ture,” says James. This im­plies the fund will be less in­flu­enced by in­ter­est rates in the fu­ture than a bond fund with more du­ra­tion would be.

Newspapers in English

Newspapers from South Africa

© PressReader. All rights reserved.