Fixed income team

Africa Fixed Income Opportunities Strategy

Tapping into Africa's long-term growth and development story

Strategy overview

Investment Approach
Bottom-up high-conviction ideas are used to build the portfolio in line with top-down targets.

Investment Opportunity
Provides direct access to Africa's longer term growth and development story

Investment Universe
Africa's diverse bond (local and hard currency) and currency markets - spanning more than 20 countries

Target Return
Outperform the performance comparison index (net of fees) over a full market cycle

Antoon de Klerk
Portfolio Manager
Thys Louw
Portfolio Manager

The role the strategy can play in portfolios

Exposure to African growth story

Growth of 3-5% p.a.in GDP over last 10 years

Diversified growth solution

Africa's bond markets are still relatively untapped, yet the potential they offer investors is significant

Yield pick-up and low duration

High-conviction approach pursues mispricing opportunities in a market that offers a premium and low duration

Portfolio diversification

Africa's bond markets have a low correlation with global capital markets, as country specific factors tend to drive market moves

Investment Philosophy

01

Africa's share of global GDP will continue to grow, and fixed income is the most direct and risk-efficient way to gain exposure to this

02

Market inefficiencies combined with a lack of research coverage and limited focus on Africa creates opportunities for active investors

03

The frontier nature of African markets mean country fundamentals can be the biggest driver of asset returns - a bottom-up approach is key

04

A wide range of independent ideas leads to more consistent risk-adjusted returns - diversification is vital in portfolio construction

Key facts

  • Asset Subclass

    Sovereign
  • Currency

    USD
  • Team

    Fixed income team
  • Geographical Focus

    Emerging Markets
  • ESG Classification

    ESG Integration
  • Comparative Benchmark

    70% S&P AFRICA SOVEREIGN BOND EX SA EX TANZANIA (15% CAPPED) + 30% NEXGEM – AFRICA (Prior to 28th Feb 2023 Concerto index)

Why Ninety One for Africa Fixed Income Opportunities Strategy

01

With an African business that spans public and private markets we are able to harness knowledge across countries and sectors when forming an investment view

02

Our presence across the region allows us to actively engage with policymakers

03

Leveraging global expertise: since inception Africa has played an important role within our global EMD strategies given the alpha potential in the region

04

Our robust, repeatable and transparent approach can be adapted to different markets and environments

Strategy Literature

Contact our client service teams.

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Risks

Currency Exchange

Changes in the relative values of different currencies may adversely affect the value of investments and any related income.

Default

There is a risk that the issuers of fixed income investments (e.g. bonds) may not be able to meet interest payments nor repay the money they have borrowed. The worse the credit quality of the issuer, the greater the risk of default and therefore investment loss.

Derivatives

The use of derivatives may increase overall risk by magnifying the effect of both gains and losses leading to large changes in value and potentially large financial loss. A counterparty to a derivative transaction may fail to meet its obligations which may also lead to a financial loss.

Emerging Market

These markets carry a higher risk of financial loss than more developed markets as they may have less developed legal, political, economic or other systems.

The content of this website is made available for informational purposes only and should not be construed as an offer, marketing, solicitation or investment advice with respect to any investment products or services. The website has not been reviewed or approved by any regulatory authority and may contain information with respect to investments products that may not be registered in some jurisdictions.

Although we believe any information obtained from external sources to be reliable, we have not independently verified it, and we cannot guarantee its accuracy or completeness (ESG-related data is still at an early stage with considerable variation in estimates and disclosure across companies. Double counting is inherent in all aggregate carbon data).

Any decision to invest in the Strategy described should be made after reviewing the offering document and conducting such investigation as an investor deems necessary and consulting its own legal, accounting and tax advisors in order to make an independent determination of suitability and consequences of such an investment. This material does not purport to be a complete summary of all the risks associated with this Strategy. A description of risks associated with the Strategy can be found in the relevant offering or other disclosure documents where applicable. Copies of such documents are available upon request.

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