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“Conservative positioning has prepared the Fund well to take advantage of any weakness” - Philip Bradford

Print

17 Mar 2020

Conservative positioning has prepared the Fund well to take advantage of any weakness

With the current volatility and uncertainty in the financial markets both globally and locally, we felt it prudent to provide an update on the Sasfin BCI Flexible Income Fund.

The objective of the Fund is to provide investors with a high level of income whilst preserving capital. The Fund has a flexible mandate and actively invests in conservative instruments like cash and fixed-rate and floating-rate bonds.

Current Fund positioning:

  • The Sasfin BCI Flexible Income Fund has been conservatively positioned.
  • The fund management team had actively reduced the risk in the Fund in January 2020 to its lowest exposure to fixed-rate bonds and its highest exposure to cash and liquid assets since inception in 2015.
  • This conservative positioning has prepared the Fund well for this sell off in the markets and to take advantage of any weakness.
  • The performance of Fund is still positive year to date despite the recent sell off in bonds and has continued to perform relatively well when compared to the ALBI and peers over the medium and longer term (see table and graph below).
  • The current AUM of the Fund is over R4 billion.

Going forward:

  • The liquidity of the Fund remains very good with a high exposure to cash and liquid investments.
  • The recent volatility has presented us with the opportunity to selectively buy conservative investments at very attractive yields
  • This will allow the Fund to continue to provide a high level of income for investors for many years to come.
  • Preservation of capital will remain at the forefront of any investment decisions.

Investment performance summary (to end 13 March 2020) Source:

In summary, the current gross yield on the Fund is still over 10% and we remain confident that we are well positioned to navigate this turbulent time and to continue to provide a high level of income to investors into the future.

Philip Bradford, CFA

Chief Investment Officer

Sasfin Asset Managers

 

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