Cadiz Fund News – November

CADIZ BCI MONEY MARKET FUND

The Cadiz Money Market Fund remains committed to its mandate, consistently delivering returns that outperform cash. The fund is strategically positioned to capitalise on current interest rate levels while navigating the interest rate cutting cycle. As rates begin to decline, the fund has successfully locked in favourable yields without compromising liquidity. Managed within its mandate constraints, the fund consistently outperforms its benchmark, the Alexander Forbes Short Term Fixed Interest (STeFI) Composite Index. It also diligently maintains adequate liquidity levels while minimising return volatility. 

CADIZ BCI ENHANCED INCOME FUND

In October, the fund was allowed further opportunities to invest in corporate bonds to help enhance the yield. The fund returns were positive for the month, however, exposure to nominal bonds detracted from performance as this asset class delivered negative returns for the period. Despite this, the fund upheld its long-standing record of low volatility returns, prioritising wealth growth and limiting downside risks. Trading activity during the month was guided by cash flows and reinvestments, aligning with the fund’s objectives, and maintaining a prudent approach to portfolio management. 

CADIZ BCI ABSOLUTE YIELD FUND

The fund maintained its exposure to nominal and inflation-linked bonds, which detracted from performance for the month. However, the fund still enjoyed a strong year to date, with returns looking favourable over a longer period. It also retains diversified exposure to floating rate notes, which once again contributed positively to performance by offsetting some of the negative returns from bonds. Trading activities during the month included 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 manage prevailing risks. 

CADIZ BCI BOND FUND

The All Bond Index returned -2.2% in October, as local bond yields rose amid a risk-off environment driven by uncertainty around the US elections and the unexpected shortfall in government revenue highlighted in the Medium-Term Budget Policy Statement. The fund’s nominal government bond exposure detracted from performance for the month. Nevertheless, the fund has had a strong year to date, with returns looking favourable over a longer period. The fund remains primarily invested in government bonds, strategically positioning its duration and exposure levels to align with the current investment outlook.