NAV on 2019/11/14
|NAV on 2019/11/13
|52 week high on 2019/08/29
|52 week low on 2018/12/03
|Total Expense Ratio on 2019/09/30
|Total Expense Ratio (performance fee) on 2019/09/30
Boutique Collective Investments (RF) (Pty) Ltd.
South African--Multi Asset--Income
STeFI Composite Index
Ashburton Fund Managers Ltd.
Nolan read for his MCom degree from the University of the Witwatersrand and is a CA(SA). He gained fixed income experience during his seven years at Rand Merchant Bank and six years at Deutsche Bank. After the great financial crises, he was appointed to head the Deutsche Bank European Structured Credit Finance trading desk with assets under management in excess of $3 billion. Following the orderly restructuring and exit of these problem assets, he was appointed to the New York offices where he provided risk reduction solutions to clients. He was successful in managing the fixed income portfolios at Efficient Select, with the fund being a regular feature of the top quartile of performers on most meaningful time periods.
Efficient Fixed Income comment - Sep 13
The Efficient Fixed Income Fund returned 1.23% for the month of September. The fund's benchmark (the SteFi index) returned 0.43% over the time frame in question.
Developments abroad continue to drive the performance of the domestic South African markets. September will be remembered as the month when the United States Federal Reserve Bank (the 'Fed') surprised the market by deciding not to reduce the stimulus that it has been providing in the form of Quantitative Easing. Our interpretation of this surprise is twofold. Firstly, the Fed has reason to be concerned about the near term outlook for the US economy and secondly, the Fed was concerned about the extent of the increase in bond yields since its initial announcement in June. We therefore take comfort from the communication that the Fed is watching the US bond yields and that it will insulate the market against excessive shocks where possible.
September was also a month to remember for the stubbornness of politicians. At the time of writing, it looks increasingly likely that the government of the United States will be unable to reach agreement on a budget going forward. This increases the likelihood of a government shutdown, with non-essential services being shuttered for a while. Such a shuttering will create a significant drag on the economy and could result in weaker economic data for the fourth quarter of 2013 than we had anticipated. Such weak data might further reduce the propensity of the Fed to significantly taper their Quantitative Easing.
Both of the above events were significantly positive for the bond market. We are happy to have generated an attractive return on your portfolio within the context of mitigating the risk of a drawdown should the events have played out otherwise.
We wrote last month that we saw value in the short dated R157 bond that matures in September 2015. The market finally agreed with us and the bonds rallied significantly. We used this as an opportunity to exit the position and lock in the profits.
Looking forward, we are starting to see South African bonds as having moved to a fair value. On the back of the near term head winds to the US economy, the bonds are even moving towards being an attractive investment for the next few months. Our strategy is to increase our exposure to bonds, while remaining cautious in a very volatile market.
We have seen that the listed property sector has also now moved closer to fair value and we are selectively reducing our underweight position towards a more neutral stance. We also see the current developments as likely to be supportive of the South African Rand. Therefore, we are also trimming our holdings of United States Dollar denominated assets.
The fund has a forward yield (net of asset management fees) of 6.12%.
The Select BCI Fixed Income Fund is a South African Income Fund. The objective of this portfolio is to maximize interest income and preserve the portfolio's capital and provide liquidity. Investments to be included in the Select BCI Flexible Income Fund will apart from assets in liquid form, consist of interest bearing and non-equity securities, fixed interest instruments (including but not limited to bonds, cash or fixed deposits and money market instruments), debentures and preference shares of an income nature, property securities as well as other income enhancing securities which are considered consistent with the portfolio's primary objectives.