The skies are blue, blossoms are blooming and the trees are budding. That’s right, spring has sprung in Johannesburg and that means time for some spring cleaning, out with the old and in with the new.
And it just so happens that asset management firm, Cadiz has launched a brand new unit trust fund, the Cadiz Stable Fund.
Cadiz has a history of successful fund management with their Managed Flexible fund awarded an award for the best domestic asset allocation prudential fund earlier this year. This follows recognition by Morningstar as the Best Specialist Fund house in 2011, amongst other impressive accolades. So while the new Stable Fund may not be tried and tested just yet, the historical performances of Cadiz funds in general bodes in their favour.
The team responsible for the Cadiz institutional “inflation plus 3%” fund – which has never delivered a negative rolling 12-month return and has outperformed its benchmark since its inception in 2006 – will be taking the reins of the new Cadiz Stable Fund.
The Stable Fund is aimed at providing investors with a long-term investment vehicle that will yield reasonable real returns of inflation plus 3% while endeavouring to reduce the variability of returns year on year. The fund manager intends to achieve these results by broadly diversifying across asset classes including listed equities, listed property, bonds, inflation-linked bonds, cash and derivatives. The fund will allow investors the opportunity to invest in a fund that is based on, yet more conservative than, the Cadiz award-winning Inflation Plus 5% unit trust.
At the outset, the fund is well balanced between defensive assets that offer growth certainty and capital protection, against undervalued growth assets that have above average inflation beating prospects.
It will be actively managed and is expected to change over time to reflect the management team’s assessments of interest rates and equity trends. The exposure to growth assets such as shares and property will not exceed 40% however, in order to keep the variability of returns to a minimum. As a result, the fund will be well suited to conservative investors such as those requiring an income after retirement.