Top performing Cadiz Money Market fund now exceeds R2 billion

Continued strong net inflows, prompted by the fund’s consistently superior performance and lowest retail unit trust annual management fee of 0.285% (including VAT), have pushed the assets under management of the Cadiz Money Market Fund above the R2 billion mark for the first time.

Paul Hutchinson, head of Cadiz Collective Investments said: ‘Since its launch, the Cadiz Money Market Fund has regularly offered the highest yield among South African money market unit trust funds. The effect of this higher yield is that the Cadiz Money Market Fund has been the top performing money market unit trust over most measurement periods since its launch on 1 March 2006 with, for example, a return of 12.17% for the year to 31 May 2009 (source: Morningstar).’

Hutchinson added that the support for the Cadiz Money Market Fund had emanated from all quarters, including portfolio managers looking for a safe haven from the volatility of the equity markets, as well as private investors, who are able to access the fund with as little as an initial payment of R20 000 or R1 000 per month. This was in contrast to at least one other unit trust Manager that had increased its minimum investment amount to R100 000. “We have no such intention and welcome any investors who cannot meet this relatively high barrier.”

He said the fund is expertly managed by Adré Smit, with over 28 years’ experience in managing money market and fixed interest portfolios and who is one of the most recognised and respected money market managers in South Africa.

Considering the immediate outlook for the fund, Smit said: ‘Comments by the Reserve Bank Governor at the end of May’s Monetary Policy Committee (MPC) meeting lead us to believe we are near the end of the interest rate cutting cycle. We do expect there to be one further rate cut of 50 basis points at the end of June MPC meeting.

‘Even though money market rates have declined dramatically over the past few months, there still remain benefits to be derived from investing in longer-term paper as opposed to rolling your funds at the overnight call rate. This is particularly so if, as we expect, the repo rate is to be reduced by a further 50 basis points later this month. We shall therefore continue investing in longer-term paper, bearing in mind that the maximum duration (term to maturity) of any paper in the fund is 365 days and that the fund’s weighted average term to maturity cannot exceed 90 days (at end May this stood at 89 days).’

The current yield of the Cadiz Money Market Fund is an attractive 9.58% (Friday 5 June 09) and, unlike fixed deposits and a number of other money market products, it offers daily liquidity. If you invest before 11:00 you receive value for that day; similarly if you repurchase before 11:00 your repurchase will be processed for value that day and the repurchase amount paid across to your bank account the same day.