Fund News – June 2025

CADIZ BCI MONEY MARKET FUND

The Cadiz Money Market Fund once again delivered returns commensurate with cash for the month of May, while remaining true to its mandate. Interest rates continue to decline, but the fund remains well positioned to provide competitive returns in the money market universe. The fund strategically targets high-quality corporate credit to optimise returns, ensuring full compliance with mandate parameters. The fund has consistently outperformed its benchmark, the Alexander Forbes Short Term Fixed Interest (STeFI) Composite Index, all while maintaining sufficient liquidity and minimising return volatility.

CADIZ BCI ENHANCED INCOME FUND

The Cadiz Enhanced Income Fund benefitted well from its exposure to nominal bonds as yields declined on the back of reduced trade tensions on the global stage. A de-escalation in local political tensions, together with a benign inflation outlook, also contributed to the positive returns achieved during May. The fund has therefore increased its duration sensitivity to take advantage of the declining yields. Corporate bond spreads remain compressed as demand outstrips supply. The fund managed to participate in opportunities in this space, however, which provided further support to the performance achieved. Trading activity during the month was primarily driven by cash flows and reinvestments, in line with the fund’s objectives.

CADIZ BCI ABSOLUTE YIELD FUND

The Absolute Yield Fund’s exposure to nominal bonds drove most of the performance achieved during the month. Reduced global trade tensions led to a decline in bond yields. Positive sentiment was further bolstered by easing domestic political risks and subdued inflation expectations. In addition, the fund’s exposure to inflation-linked bonds and corporate bonds supported the return achieved during the period. Trading activity during the month focused on deploying cash and reinvesting maturing instruments. Duration sensitivity was also increased in line with the investment strategy and prevailing market conditions. The fund remains actively managed to capitalise on opportunities and mitigate risks.

CADIZ BCI BOND FUND

Bond yields moved lower in May, driven by a reduction in global trade tensions. Locally, easing political uncertainty and a favourable inflation outlook further supported the positive market performance. The Cadiz Bond Fund derived support from the declining yields resulting in the positive returns achieved for May. Most of the returns came from the long end of the yield curve as the market reverted from the negative sentiment displayed in the previous period. The FTSE/JSE All Bond Index (ALBI) posted a positive return for the month and remains in positive territory year to date. The fund reflected the positive returns and remains strategically positioned to take advantage of further opportunities across the curve.