Cadiz Fund News – February 2025

CADIZ BCI MONEY MARKET FUND

The Cadiz Money Market Fund remained steadfast in its mandate, delivering returns that outperformed cash in January. The fund remains well positioned to capitalise on declining interest rates through strategic asset positioning. While the benefit of locking in higher yielding assets is gradually diminishing as interest rates decrease, the fund continues to offer competitive yields while maintaining strong liquidity.

Managed 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.

CADIZ BCI ENHANCED INCOME FUND

The Cadiz Enhanced Income Fund once again delivered positive returns for the month of January. Most of the contribution came from its exposure to corporate bonds, floating rate notes and high-quality cash instruments. The fund upheld its long-standing track record of low volatility returns, focusing on wealth growth while effectively limiting downside risk.

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.

CADIZ BCI ABSOLUTE YIELD FUND

The fund’s exposure to floating rate notes and nominal bonds stood it in good stead for the month of January as these asset classes delivered positive performance over the period. The fund adjusted its sensitivity to interest rate moves to accommodate the volatility experienced in the market during the month. Inflation-linked bonds detracted marginally from the overall performance as demand for this asset class diminished. 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

January was a volatile month for nominal bonds. Most of the fluctuations in yield was derived from the volatility and uncertainty experienced in global markets. After initial weakness, the bond market recouped most of its losses. The FTSE/JSE All Bond Index (ALBI) benchmark returned 0.44% for the month. Despite the volatility, the fund delivered positive performance for the period. It remains primarily invested in government bonds, with its duration and exposure levels strategically aligned with the current investment outlook.