Apr 21, 2020
After the SARB cut the Repo rate by a cumulative 2% over the month of March, 1 year fixed rate negotiable certificate of deposits (NCDs) have rallied 1.68% since the start of March and 2.10% since the start of the year. We were well-positioned for the rally, having locked into longer dated fixed rate instruments at higher levels. As such, the yield on the fund remains protected with an attractive premium to call rates opening up over the last month. The current pickup over call rates of the Ninety One STeFI Plus Fund is around 3.5% and between 2.5% to 2.7% for the Ninety One Corporate and Money Funds respectively. The funds remain attractive relative to call rates and comfortably outperforming short dated fixed deposits.
Given the market volatility and unprecedented circumstances, we positioned the portfolios more defensively over the month, reducing risk to longer-dated floating rate maturities while also building some extra liquidity in the portfolios. Given our constructive view on inflation and a 5% to 6% contraction in the economy in 2020, we see a high probability of further rate cuts from here. We will use some of this liquidity to look for attractive opportunities that have opened up in the market.
Annualised performance in ZAR to 31 March 2020
Past performance is not a reliable indicator of future results, losses may be made.
Source: Morningstar, dates to 31 March 2020, performance figures above are based on lump sum investment, NAV based, inclusive of all annual management fees but excluding any initial charges, gross income reinvested, fees are not applicable to market indices, where funds have an international allocation this is subject to dividend withholding tax, in South African Rand.
Annualised performance is the average return per year over the period. Individual investor's performance may vary depending on actual investment dates. Highest and Lowest returns are those achieved during any rolling 12 months: Corporate Money Market: Mar-09 12.4% and Aug-13 5.4% │ STeFI Plus: Jun-01 13.8% and Aug-14 4.2% │ Money Market: Mar-20 8.5% and Sep-13 5.5%
The Fund is actively managed. Any index is shown for illustrative purposes only.