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100

NAV on 2019/05/24
NAV on 2019/05/23 100
52 week high on 2018/05/28 100
52 week low on 2018/05/28 100
Total Expense Ratio on 2019/03/31 0.59
Total Expense Ratio (performance fee) on 2019/03/31 0
NAV Incl Dividends
1 month change 0% 0.58%
3 month change 0% 1.74%
6 month change 0% 3.56%
1 year change 0% 7.27%
5 year change 0% 7.04%
10 year change 0% 6.43%
Price data is updated once a day.
  • Sectoral allocations
Liquid Assets 4025.55 100.00%
  • Top five holdings
FINANCEINSTIT 3411.66 84.75%
GOVTISSUPAPER 436.13 10.83%
PUBLENTISSPAP 60.43 1.5%
  • Performance against peers
  • Fund data  
Management company:
PSG Collective Investments (RF) Ltd.
Formation date:
1998/10/19
ISIN code:
ZAE000020921
Short name:
U-PSGMONM
Risk:
Unknown
Sector:
South African--Interest Bearing--Money Market
Benchmark:
South African - Interest Bearing - Money Market Mean
Contact details

Email
assetmanagement@psg.co.za

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

Telephone
021-799-8000

  • Fund management  
PSG Asset Management (Pty) Ltd.
Lyle Sankar


  • Fund manager's comment

PSG Money Market comment - Jun 17

2017/09/08 00:00:00
Current context
Lately, the macroeconomic environment in South Africa has been relatively tricky to navigate. On the one side, we have falling inflation, which should be positive for the real disposable incomes of South African consumers. Lower food price inflation will relieve pressure on lower income earners in particular, given the higher weighting of food in average monthly household spend. Optimistically, we could expect this to spur consumption and demand - and therefore GDP. However, the other side of the coin is that South Africa entered a technical recession (two consecutive quarters of negative real GDP growth) at the end of the first quarter. This followed a protracted decline in the automotive, manufacturing and mining industries; all key sectors to economic growth in South Africa. As a result - and added to unemployment of 27.7% and low levels of credit extension - the average consumer will likely be unable to take advantage of falling prices.
This is the South Africa Reserve Bank’s dilemma, with it having held the repo rate at 7% since March 2017. Clouded by political and rating downgrade narratives, it’s also a question on most investors’ minds: should the repo rate be cut to support real GDP growth, or is it appropriate to remain at 7% to protect the rand? We believe that this uncertainty has kept money market rates elevated at attractive levels for our investors.
Our perspective
Core to our fixed income philosophy is that our investment process focuses on the information we have available, avoiding the tendency to forecast. While political and economic uncertainty remains entrenched in investors’ minds, our portfolio positioning reflects that we do not know how specific events will turn out, or what the subsequent market reaction will be. This drives the need to ensure we diversify the fund appropriately, and position it to benefit from a range of possible outcomes.
While we do believe that recent data point to lower inflation and steadier interest rates going forward, we are also aware that event risk is considered higher. We therefore believe that it is important to maintain a sufficient weighting in floating rate instruments (roughly 40% of the fund as at quarter end). This gives us comfort that we are positioned to take advantage of a potential turn in the interest rate cycle, but also have insurance against a sudden increase in interest rates.
Portfolio positioning
As mentioned in previous commentaries, we look to extend fund duration through a bigger position in fixed rate instruments. These instruments are expected to perform better over the near term, with the interest rate cycle largely understood to be at a peak of 7%. We have favoured the longer end of the negotiable certificate of deposit curve, as we believe that rates of greater than 8% for a one-year term are attractive, offering a potential real yield of more than 2%. Despite the shortage in issuance of commercial paper (corporate lending in the money market space), we have been able to add exposure where we have found mispricing in issuers we are comfortable with. The fund continues to have exposures diversified across the South African banks, with an allocation to treasury bills. This ensures that we are comfortable with overall fund liquidity.
  • Fund focus and objective  
The fund aims to provide capital security, a steady income yield and high liquidity.
The investment objective of the portfolio is to provide a medium whereby investors can obtain undivided participation in a diversified portfolio of such money market instruments as defined from time to time. The portfolio will comply with legislation governing retirement funding.
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