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The month of March was characterized by large swings in global inflation and rate hike expectations. This prompted central banks, including our local Reserve Bank, to raise rates to combat the effects of inflation. Below is a summary of our fund positioning over the period.
CADIZ BCI MONEY MARKET FUND
The Cadiz BCI Money Market Fund continued its strong performance over March, delivering on its goal of low volatility and cash beating returns. The team continues to manage the fund within the mandate constraints and aims to provide benchmark beating returns, while ensuring high liquidity and low risk. Trading over the month was limited to liquidity management and the reinvestment of maturities and coupons. The team also took small positions in selective exposures to corporate money market instruments.
CADIZ BCI ENHANCED INCOME FUND
The Cadiz BCI Enhanced Income Fund performed well due to its highly diversified allocation to corporate floating rate securities. The fund also gained on its exposure to South African nominal bonds. The fund maintained its track record of consistently delivering low volatility returns aimed at growing wealth, while limiting downside risk. Trades implemented during the month were due to effective cash management strategies as well as selective positioning in specific issuers and instruments. The team also reinvested some repayments of recent maturities.
CADIZ BCI ABSOLUTE YIELD FUND
The Cadiz BCI Absolute Yield fund had a strong month on the back of the rally in South African government bonds. The fund’s selective holding of corporate credit instruments also added to the positive performance and lowered the variability of returns. There was limited trading during March, mainly due to the selective trading opportunities and management of cash in the portfolio. The fund remains actively managed by the team to take opportunities as they present themselves and to manage prevailing risks.
We continue to remain true to our investment philosophy of incremental outperformance over time and to manage the funds in line with their respective risk profiles and designated mandates. Please feel free to contact us should you require any further information on any of our funds detailed above.