Spirit Insider – September 2023September 5, 2023
Business Partnership With Government: Reasons For Cautious OptimismSeptember 15, 2023
Welcome to the September edition of Fund News.
CADIZ BCI MONEY MARKET FUND
During the month of August, the Money Market Fund continued to produce cash beating returns, while maintaining minimal volatility. Trading activity was primarily prompted by deployment of cash and managing maturities. The fixed income team continues to manage the fund within the prescribed mandate constraints with the objective of outperforming the benchmark, while ensuring substantial liquidity and low variation of return. The fund’s performance in the current environment is bolstered by the high interest environment which is offering robust returns with minimal downside risk.
CADIZ BCI ENHANCED INCOME FUND
The robustness of the Cadiz BCI Enhanced Income Fund’s investment process was tested during the month of August, primarily due to the investment in South African Government Bonds (SAGBs), which displayed heightened volatility over the period. The fund remains highly diversified across exposures to floating rate notes, nominal bonds and money market instruments. This diversification helped mitigate the adverse effects of the SAGBs on the overall performance of the fund. The fund also remained consistent with its long-standing track-record of consistently delivering low volatility returns and focusing on growing wealth, while limiting downside risks. The trading activities implemented during the month were driven by cash flows and reinvestment strategies aligning with the fund’s objective of prudent portfolio management.
CADIZ BCI ABSOLUTE YIELD FUND
The Cadiz BCI Absolute Yield fund performed in line with expectation given its relatively higher position in South African Government bonds, which detracted somewhat from the fund’s performance for August. The fund’s overall performance was boosted, however, by the exposure to Inflation-Linked Bonds, corporate bonds, and floating rate notes. Notably, the selective inclusion of corporate credit instruments proved beneficial, contributing positively to the fund’s performance and reducing return variability. Trading activities during the month were limited to the deployment of cash and re-investments of maturing instruments. The fund remains actively managed by the team to take opportunities as they present themselves and to manage prevailing risks.