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8.94  /  0.84%


NAV on 2020/07/10
NAV on 2020/07/09 1050.31
52 week high on 2020/02/27 1165.24
52 week low on 2020/03/24 944.79
Total Expense Ratio on 2020/03/31 0.72
Total Expense Ratio (performance fee) on 2020/03/31 0.43
NAV Incl Dividends
1 month change -4.58% -2.48%
3 month change 2.51% 4.77%
6 month change -7.09% -2.55%
1 year change -8.28% 0.51%
5 year change -1.07% 7.71%
10 year change -0.04% 8.27%
Price data is updated once a day.
  • Sectoral allocations
Gilt 21.03 0.75%
Gilts 2301.52 81.94%
Liquid Assets 100.35 3.57%
Money Market 385.78 13.73%
  • Top five holdings
MM-11MONTH 270.59 9.63%
MM-09MONTH 110.18 3.92%
AIRNAM04 21.03 0.75%
MM-08MONTH 5.01 0.18%
  • Performance against peers
  • Fund data  
Management company:
Allan Gray Unit Trust Management (RF) Pty Limited
Formation date:
ISIN code:
Short name:
South African--Interest Bearing--Variable Term
All Bond index
Contact details




  • Fund management  
Mark Dunley-Owen
Londa Nxumalo

  • Fund manager's comment

Allan Gray Bond comment - Dec 19

2020/02/14 00:00:00
The year 2019 was characterised by ongoing trade tensions and concerns about the resultant slowdown in the global economy. The International Monetary Fund (IMF) expects global economic growth to decelerate to 3% in 2019, down from 3.6% in the previous year, with major economies leading the decline. The US treasury yield curve was inverted for most of 2019, further raising fears of an impending recession. Major central banks sprang into action to defend their respective economies, with the US Federal Reserve cutting interest rates by a cumulative 75 basis points (bp) over the year, the European Central Bank resuming net asset purchases, and the People’s Bank of China reducing the required reserve ratio for banks several times.
The monetary easing by major central banks was a boon for emerging markets – the J.P. Morgan EMBI Global Index shows emerging market bond spreads compressing from 441bp at the beginning of the year to 277bp in December. South African bonds also benefited, with JSE All Bond Index (ALBI) performance belying dismal fundamentals. Economic growth is expected to have only been 0.5% in 2019, which will not boost government revenues enough to offset increased spending, e.g. on state company bailouts. This will result in more borrowing and a ballooning debt pile. Adding to the gloom, all three international credit rating agencies (Fitch, Moody’s and Standard & Poor’s) put South Africa on a negative outlook. The only bright spot was inflation, which consistently printed at or below the Reserve Bank’s target midpoint of 4.5%.
Considering the state of the local economy, the South African credit market was incredibly robust. Issuance was at multiyear highs, exceeding 2017’s record R142bn by November. Strong volumes were recorded by banks, corporates, securitisations and state-owned entities. Interestingly, municipalities remained absent from the credit market. The credit market was favourable for issuers in 2019 due to a large amount of pent-up demand for credit assets. Credit spreads continued to tighten throughout the year – although the moves were less pronounced than in prior years – and auctions were consistently oversubscribed. During the quarter, we added bank AT1 paper from Investec Group and ABSA Group. Although credit spreads have compressed, bank AT1 paper continues to offer relatively good value compared to bank senior and corporate paper. We also introduced SANRAL government-guaranteed bonds, which offer an attractive pick-up over their benchmark. Bonds sold off after October’s Medium- Term Budget Policy Statement and subsequent negative rating outlooks, which afforded us the opportunity to buy across the long end of the curve.
The Fund’s duration remains significantly short relative to the ALBI, a conservative stance we feel is warranted given upside risks to bond yields in 2020. February’s Budget Speech will be key to gauge how likely South Africa is to turn its finances around and possibly avoid a final downgrade to subinvestment grade by Moody’s.
  • Fund focus and objective  
The Fund invests in South African interest bearing securities. Securities include national government, parastatal, municipal, corporate bonds and money market instruments. The Fund price is sensitive to interest rate movements because of the long-term nature of the Fund's investments. The duration of the Fund may differ materially from the benchmark. The Fund is managed to comply with investment limits governing retirement funds.

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