CADIZ ASSET MANAGEMENT

Cadiz is a specialist local fixed-income manager providing investment solutions to both the retail and institutional market, whose philosophy is to provide incremental outperformance over time within defined risk parameters.

The Cadiz Money Market Fund remained committed to its mandate, delivering returns in March that outperformed cash. The fund remains competitively positioned despite the lower interest rate environment.  The fund continues to enhance yields through investments in high-quality corporate credit, treasury bills and various bank deposits.  Within its mandate constraints, the fund consistently outperforms its benchmark, the Alexander Forbes Short Term Fixed Interest (STeFI) Composite Index, while diligently maintaining adequate liquidity levels and minimising return volatility. At the end of March, the forward yield on the fund was 8.42%.

The Cadiz Enhanced Income Fund once again capitalised on opportunities in corporate bonds, while maximising yield and maintaining sufficient liquidity. The fund delivered positive returns for the month despite the muted performance from nominal and inflation-linked bonds. It remains well diversified across all sectors, instruments and issuers and is well positioned to deliver on its mandate of providing incremental outperformance over time. Trading activity during the month was guided primarily by cash flows and reinvestments, aligning with the fund’s objectives, and upholding a prudent approach to portfolio management. At the end of March, the forward yield of the fund was 9.00%, with an effective duration of 0.56.

The Cadiz BCI Absolute Yield Fund The fund remains well diversified across all sectors, instruments and asset types. The fund lowered its sensitivity to interest rate movement marginally during the month to account for the ongoing market volatility and uncertainty. Most of the positive returns over the period were generated from the exposure to corporate credit and money market instruments. Returns from the nominal and inflation-linked bond market were muted but nevertheless contributed positively to the overall performance of the fund. Trading activities during the month involved deploying cash, reinvesting maturing instruments, and managing duration to align with the investment strategy and market outlook. The fund remains actively managed by the team to capitalise on opportunities and mitigate prevailing risks. At the end of March, the forward yield of the fund was 9.16% and duration was slightly shorter at 1.78.

The Cadiz BCI Bond Fund Most of the returns achieved in the local bond market came from the short to medium part of the yield curve. The longer end of the curve detracted from performance as the curve flattened over the period. Despite the challenging backdrop, the fund delivered comparative performance relative to its benchmark and peers. Fund duration was adjusted to be largely in line with the benchmark duration, with positions taken at various points to capitalise on the volatility experienced. The fund is primarily invested in government bonds and is positioned at a neutral stance relative to its benchmark as market uncertainty prevails. At the end of March, the forward yield of the fund was 9.87% while duration was shortened to 5.74.