The Futuregrowth Yield Enhanced Income Composite aims to deliver excess return through a combination of interest bearing asset allocation, active interest rate risk management, appropriate yield curve positioning and exposure to higher yielding fixed and variable rate non-government bonds.
The Composite is also mandated to invest in inflation-linked bonds, unlisted bonds and equities (no more than 3% of the portfolio). Delivering a stable income is balanced with a commitment to utilise market opportunities to seek maximum capital gain, but also to revert to strategies to protect capital when market conditions turn negative. The Composite is not allowed a modified duration great than 2.00. Wider derivative limits allows the manager more leverage in protecting the Composite against potential capital loss. The benchmark is 20% ALBI and 80% STeFI.
The Composite aims to outperform the benchmark by 1% over any rolling 3-year period. It aims to offer a high level of income while capital loss may not exceed a rolling 3-month period.
The Composite invests in a wide range of fixed rate, variable rate and inflation-linked bonds issued by the RSA government, state owned enterprises and the corporate sector subject to credit committee approval. The composite is also mandated to invest in unlisted assets.
YIELD ENHANCED STRATEGY
Our yield enhanced strategy relies on maintaining strong relationships with market players. This allows us to see a large degree of dealflow on a continuous basis and keep an eye on ever-evolving credit events in the market. In the unlisted space, our specialist structuring skills allow us to make loans that ensure lenders achieve the greatest degree of investor protection through loan terms, covenants and security while ensuring risk-adjusted returns with good diversification.