The TBI Global Multi-Asset Income UCITS ETF – ZAR HEDGED Distributing C Class

The TBI Global Multi-Asset Income Fund is a pioneering, actively managed ETF that offers global exposure while minimising currency risk. This is the first of its kind as an inward-listed global multi-asset income fund on the JSE.

The fund combines the best of absolute return funds and income funds by driving consistent returns with a focus on generating sustainable income. This makes it a smart choice for cautious investors as it provides enhanced portfolio diversity to deliver high, sustainable income with limited currency risk.

Key Points for Fund Managers and Investors
• Global Exposure: The fund invests in high-quality global assets, providing better risk adjusted returns and stability than the limited South African market.
• Rand Hedging: By hedging hard currency to the South African Rand, the fund minimise currency risk for local investors.
• Multi-Asset Strategy: Diversifies investments across various asset classes such as bonds, equities, and property to ensure stability and growth.
• Income Focus: Designed to generate sustainable income through defensive income generating assets and other diversified sources.
• Accessibility: Listed on the JSE, offering the convenience and tax benefits of an ETF without exchange control limitations.

Detailed Breakdown
Fund Nature:
• Global Income Focus: Targets high-quality income-generating assets globally, currency hedged to minimise currency risk.
• Diversification: Spreads investments across global markets to reduce risk and enhance returns.
• Income Generation: Aims for a high level of sustainable income while preserving investor capital.

Investment Approach:
• Strategic Diversification: Invests in a mix of fixed income, growth, and real assets to balance risk and return.
• Active Management: The fund is actively managed, meaning that investment decisions are made by professional fund managers who continuously monitor the market and adjust the fund's risk exposure to optimise returns. Unlike passive funds that simply follow a market index, actively managed funds aim to outperform the market through strategic asset allocation, stock selection, and risk management. This approach allows the fund to be more responsive to market conditions and to take advantage of opportunities for enhanced returns while minimising downside risks.
• Rand Hedging: Continual hedging of hard currency to the Rand to minimise currency risk for South African investors.

Benefits:
• Global Quality: Access to higher quality global assets compared to the limited and overpriced South
African credit market.
• Stable Returns: Provides smoother returns with lower volatility due to diversified asset classes.
• Capital Preservation: Focuses on protecting investor capital while generating income.
• Quarterly Distributions: Returns are distributed quarterly as tax-exempt foreign dividends, providing regular income.

The South African Context:
• Limited Options: The South African market is restricted to a small, overpriced universe of credit assets. Many investors are chasing after a limited number of opportunities, which drives up prices and reduces potential returns.
• Higher Quality Assets Globally: Investing globally allows access to better quality assets and more fairly priced assets compared to the South African market, where the government’s BB- international rating limits credit quality.
• Liquidity and Pricing: International markets offer better liquidity and more transparent pricing. In South Africa, the credit pricing is abnormally tight due to high demand and limited supply, compounded by the rand’s volatility.

For South African Investors:
• Ease of Access: No need for exchange control approval or complex procedures.
• Tax Efficiency: Tax benefits with 0% tax for companies and 20% DWT for individuals on foreign dividends.
• Investment Convenience: Simplified process with the benefits of an ETF, including global diversification and ease of trading.

What Makes This Fund Unique?
• First of Its Kind: As the first inward-listed global multi-asset income fund on the JSE, it combines global diversification, income focus, and Rand hedging in a single, actively managed ETF.
• Innovative Structure: The fund’s structure allows South African investors to gain access to high-quality global assets without the usual barriers of exchange control approvals and foreign investment complexities.

Summary
The TBI Global Multi-Asset Income UCITS ETF – ZAR HEDGED Distributing C Class is an actively managed ETF that offers a cautious investment approach. It provides access to high-quality global assets with minimal hard currency risk, making it an ideal choice for South African investors seeking sustainable income and capital preservation with the convenience of an ETF. With its innovative combination of global exposure, Rand hedging, and multi-asset strategy, this fund is set to become a cornerstone of smart, diversified investment portfolios.