Easing inflation and improved fiscal messaging supported bond performance

• Headline inflation: 3.5%
• Core inflation: 3.4%
• FTSE/JSE All Bond Index: +1.74% total return
• 10‑year yields stabilised near the high‑8% range due to reduced issuance and improved sentiment.
• ILBs remained supported by demand for real yields.

Portfolio implications

• Add duration selectively, with emphasis on the belly of the curve (5–12 years).
• Use investment‑grade credit as a stable income anchor.
• Keep high‑yield exposure modest and focused on higher‑quality issuers.
• South African nominal bonds remain compelling given high real yields, especially in the 5–12‑year area.
• Use ILBs strategically for long‑term inflation protection.

• Elevated cash positions provide valuable optionality in an environment where dislocations may present opportunities.