2019/03/11 00:00:00

SA bonds, represented by the South African All bond Index, rose 2.80% in the fourth quarter of 2018. The Rand weakened by 1.45% against the U.S. Dollar in the fourth quarter. The Fund has performed in line with the index as it mirrors the constituents of the index.
The last quarter of 2018 was a very volatile period for most asset classes globally as well as locally. EM currencies have been desperately trying to shrug off negative sentiment, particularly out of China. Locally, the SARB hiked rates by 25 basis points, pointing to heightened risk of higher primary and secondary inflation.
Local SA growth has been very elusive with 2 quarters of negative growth but there was a bit of positive relief from the 3rd Quarter number. The concerns over weak global growth are coming to the fore with US printing slightly lower than expected growth at 2.5% y/y. The European Central Bank is also cutting growth forecasts, highlighting structural economic issues as the stimulus program is coming to an end. SA is expected to have lackluster growth of around 1.7% for the year 2019 and should be a politically interesting period with the forthcoming National Election.
The fund tracks the performance of the the South African All bond Index containing the top 20 vanilla bonds by market capitalization and liquidity.