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-0.12  /  -0.1%

121.22

NAV on 2019/03/25
NAV on 2019/03/22 121.34
52 week high on 2018/08/30 124.11
52 week low on 2018/12/18 120.53
Total Expense Ratio on 2018/12/31 0.72
Total Expense Ratio (performance fee) on 2018/12/31 0
NAV Incl Dividends
1 month change -1.29% 0.47%
3 month change 0.44% 2.23%
6 month change -0.66% 3%
1 year change -1.16% 6.34%
5 year change 0.78% 8.07%
10 year change 0% 0%
Price data is updated once a day.
  • Sectoral allocations
Basic Materials 13.23 0.75%
Consumer Goods 9.22 0.53%
Consumer Services 7.14 0.41%
Financials 41.30 2.35%
General Equity 77.63 4.43%
Industrials 18.13 1.03%
Liquid Assets 1502.39 85.66%
Technology 2.64 0.15%
Offshore 82.31 4.69%
  • Top five holdings
FINANCEINSTIT 1000.09 57.02%
GOVTISSUPAPER 367.97 20.98%
PUBLENTISSPAP 108.20 6.17%
DOMESTICFUNDE 77.63 4.43%
CORPDTNONCVRT 26.53 1.51%
  • Performance against peers
  • Fund data  
Management company:
PSG Collective Investments (RF) Ltd.
Formation date:
2006/04/07
ISIN code:
ZAE000181673
Short name:
U-PSGAOPT
Risk:
Unknown
Sector:
South African--Multi Asset--Income
Benchmark:
Inflation plus 1%
Contact details

Email
assetmanagement@psg.co.za

Website
http://www.psg.co.za/asset-management

Telephone
021-799-8000

  • Fund management  
Greg Hopkins
PSG Asset Management (Pty) Ltd.
Tyron Green
Lyle Sankar


  • Fund manager's comment

PSG Diversified Income comment - Jun 17

2017/09/08 00:00:00
Current context
Over the last year, most fixed income asset classes have rewarded investors with above-inflation returns. Cash returned 7.6% and government bonds returned 7.9%, while inflation over this period was 5.4%. The global environment is very supportive of local currency bonds and we have seen foreigners enter the local market as substantial buyers. In addition, credit spreads for large banks are falling, indicating good demand for credit in quality names. Not all fixed income asset classes have performed well, however. As a case in point, inflation-linked bonds returned -0.1% over the last year, due to the current downward phase of the inflation cycle.
Our perspective
The environment for fixed income investors is positive, despite the political noise we witness nearly daily and the fact that South Africa is in recession. While this is negative for the economy, it means that there is a low probability of rising inflation and hikes in short-term interest rates - which are negative for fixed income assets. In fact, consumer inflation has surprised on the low side in 2017, prompting short-term interest rate markets to price for interest rate cuts over the next year. Despite the negative growth environment and falling inflation, the South African Reserve Bank’s (SARB) Monetary Policy Committee has been erring on the side of caution by not reducing interest rates. We believe this creates good opportunity for our investors to invest in instruments offering high real yields at low levels of risk. The market is giving us a window of opportunity that may change soon.
We are still finding good opportunities in cash markets. In particular, banks are paying high yields in the front end of the curve to comply with banking regulations. We also continue to find opportunities for high real yields in the one-year and longer parts of the negotiable certificate of deposit market. We deem selective credit names attractive. However, the recent increase in demand for bank credit has seen spreads narrow and we believe the opportunities in that sector are fewer than a year ago. As such, we are searching for opportunities in other areas of credit issuance.
Government bond yields are still attractive in the medium- to longer-dated area of the yield curve, despite current political noise. We believe that building a portfolio around a single negative narrative in bonds would expose our investors to binary outcome risks, which we aim to avoid. In addition, the valuations of long-dated bonds are not merely dependent on macro drivers. Factors like the strength of South Africa’s institutions, fiscal policy and term premium play a significant role as well. We believe a lot of negative news is already reflected in the yields of longer-dated bonds. If the SARB and National Treasury maintain the current policy framework, real yields of more than 3% on these bonds are attractive in a low growth and inflation environment.
Portfolio positioning
We have been allocating capital over the various interest rate curves where they have presented high real yield opportunities. Firstly, the long end of the cash curve - where banks are willing to pay higher yields for longer-term funding - remains attractive. We have also selectively added to our government bond position in the medium-end of the curve. In addition, we participated in credit issues where credit spreads met our fair value criteria. To reduce the correlated nature of positions in the portfolio, we decided to switch a portion of the local equity position into offshore equities. We believe that the fund is well positioned for investors and savers looking for high real yields at low levels of risk.
  • Fund focus and objective  
The PSG Diversified Income Fund is a specialist portfolio. The portfolio comprises a mix of high yielding equity securities, property, bonds, preference shares and assets in liquid form, both locally and abroad, thereby generating both tax free and taxable income, whilst preserving capital. The portfolio aims to preserve capital and to maximise income returns for the investors. The fund manager has applied a constraint on the mandate of this fund to ensure it complies with Regulation 28.
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