Cadiz Fund News March 2025

CADIZ BCI MONEY MARKET FUND

The Cadiz Money Market Fund remained committed to its mandate, delivering returns in February that outperformed cash. While the declining interest rate environment is putting downward pressure on money market returns, the fund remains well-positioned to stay competitive. As the advantage of locking in higher-yielding assets diminishes, the fund continues to enhance yields through high-quality corporate credit.

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 continued to capitalise on opportunities in corporate bonds, though yield compression has made this more challenging. Excess demand aggressively persists for a limited supply of assets. South African government bonds and inflation-linked bonds posted positive returns for the month. Given the uncertain environment, the fund maintained a conservative position, but still delivered positive returns for the month.

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 positioned it well for the month of February, as these asset classes delivered positive performance. The fund also adjusted its sensitivity to interest rate movements to account for the ongoing market volatility. Both government inflation-linked bonds and government nominal bonds contributed positively to performance, although the scarcity of credit paper and tight spreads continued to weigh on returns. 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.