CADIZ FR MONEY MARKET FUND
The Cadiz FR Money Market Fund continued to adhere to its mandate and delivered competitive returns during September. The month marked a reversal toward tighter monetary policy, however, driven mainly by the South African Reserve Bank’s (SARB) response to renewed inflationary pressure. Short-term rates remained at their previous level for most of September, before increasing by 25 basis points in the final week. The Fund remained strategically positioned, with a targeted allocation to high-quality corporate credit designed to enhance yield while maintaining full compliance with mandate guidelines and avoiding undue risk. This disciplined approach has enabled the Fund to sustain its outperformance of the Alexander Forbes Short Term Fixed Interest (STeFI) Composite benchmark.
CADIZ FR ENHANCED INCOME FUND
The Cadiz FR Enhanced Income Fund’s performance during September was driven primarily by its exposure to money market instruments, inflation-linked bonds and corporate credit. The increase in short-term interest rates during the month was supportive of returns from money market holdings, while inflation-linked bonds benefited from heightened inflation expectations. Corporate credit also contributed positively, supported by attractive carry and relatively stable credit spreads. Trading activity during the month was largely driven by cash flows, portfolio positioning and the reinvestment of maturing instruments. The Fund remains well positioned to capitalise on opportunities across the corporate and government bond markets, supported by a disciplined investment approach focused on generating attractive risk-adjusted returns while managing downside risk.
CADIZ FR ABSOLUTE YIELD FUND
The Cadiz FR Absolute Yield Fund’s performance in September was primarily achieved by positive contributions from its allocations to inflation-linked bonds and corporate credit. By reducing its exposure to nominal bonds, the Fund was able to deliver positive performance over the period. Portfolio activity during the period was focused on the strategic deployment of cash inflows, active rebalancing of portfolio exposures and the reinvestment of proceeds from maturing instruments. The Fund remains actively managed, with capital allocated selectively across fixed income markets to capture relative value and enhance portfolio resilience, while maintaining a disciplined focus on risk management, liquidity and capital preservation.
CADIZ FR BOND FUND
The Cadiz FR Bond Fund recorded a flat return for September, broadly in line with the performance of its benchmark over the period. Bond yields initially moved higher during the month, reflecting global pressure on government bonds, renewed inflation concerns and rising oil prices. The SARB’s decision to raise the repo rate added further pressure to the front end of the yield curve and reinforced expectations of a higher-for-longer interest rate environment. Despite these headwinds, a recovery in bond prices towards month-end helped to offset the negative impact of higher yields. Against this backdrop, the Fund’s relative positioning and duration management contributed positively to performance and supported the Fund’s resilience over the period. The FTSE/JSE All Bond Index (ALBI) returned 0.01% for the month and 12.82% over the trailing 12-month period. The Fund continues to deliver returns in line with its mandate and remains strategically positioned to capitalise on opportunities across the yield curve while maintaining a disciplined approach to portfolio construction.
