NAV on 2020/08/13
|NAV on 2020/08/12
|52 week high on 2019/09/12
|52 week low on 2020/03/24
|Total Expense Ratio on 2020/03/31
|Total Expense Ratio (performance fee) on 2020/03/31
Prescient Management Company Ltd. (PIM)
South African--Interest Bearing--Variable Term
BEASSA All Bond Index
Guy is Prescient's Chief Investment Strategist and one of its co-founders. After graduation, Guy worked as a bond analyst and manager, and as derivatives specialist at asset management houses including Colonial Mutual, Cape Gilt Investments and Southern Life. At Investec, Guy worked as a bond manager and was responsible for all derivative exposure in the pension funds. He then joined District Securities Bank where he was later appointed a Bank Director, before leaving to establish Prescient Investment Management with Herman Steyn
Prescient Interest Bearing Team
Prescient Bond Quant Plus Comment - Sep 19
The South African fiscal metrics continue to deteriorate. With increased expenditure, including cash injections into failing State Owned Enterprises (SOE) and below forecasted revenue growth, the market now expects a budget deficit in the October Medium Term Budget Policy Statement (MTBPS) north of 6%. As foreigners continue to sell SA bonds, it is clear they are demanding a higher risk premium than what is currently priced. Moody's credit analyst assigned to SA recently expressed a view that growth and fiscal metrics were likely to improve in SA, hence raising optimism that SA would not receive a downgrade in October. With the current growth and fiscal metrics in SA being poor, it will be interesting to see Moody's analysis of this comment post their credit review.
The SA government has moved the release of the MTBPS to the 30th of October. This is a worrying development as it only gives Moody's 2 days to assess interim budget steps before announcing the results of their rating review due for release on the 31st of October. Bonds continue to offer attractive real yields, but at heightened risk levels. With the deterioration in the sovereign balance sheet and continued warnings over Eskom and other state-owned entities, we believe a cautious stance is in order. The All Bond Index (ALBI) gained 0.51% for the month of September. Fund holdings consisted of credit exposure through banks and State-Owned Corporations, in both the bond and and cash markets, to take advantage of the additional pick-up in yield. The tactical allocation into Inflation Linked Bonds remained, as we are still of the view that there is value on offer, on both a relative and absolute basis. The Fund slightly outperformed the ALBI over the month. Credit spread compression contributed positively to performance. There were no detractors.
INVESTMENT AND RETURN OBJECTIVE
The Fund aims to generate returns above the JSE All Bond Index over time, utilising active bond management combined with strategies which aim to reduce risk over time.
The Fund invests in cash and high-quality capital market instruments. A number of techniques are used to
generate returns, including duration management, yield enhancements via credit exposure and risk
management strategies, where these strategies are designed to provide downside protection.