South Africa - Institutional
Global Strategic Income Strategy
INSTITUTIONAL
INVESTMENT OBJECTIVE:
The Coronation Global Strategic USD Income Strategy is an asset allocation strategy that invests across different fixed interest securities. It aims to achieve capital growth and a competitive annual yield, while preserving capital over rolling 12-month periods. Its benchmark is 110% of the Secured Overnight Financing Rate (SOFR). The strategy has a flexible mandate with no restriction on duration (interest rate sensitivity) and term. However, duration is unlikely to be more than three years. The strategy invests mainly in a combination of fixed, floating-rate and inflation linked securities of varying maturities, denominated in a spread of currencies and listed on recognised exchanges worldwide. Debt securities in which the strategy invests may be issued by governments, government agencies, supranational institutions, banks, credit institutions and other companies. Up to 30% of the strategy may be invested in debt securities with credit ratings between BBB+ and BBB- (or equivalent) and up to 10% may be invested in debt securities that are unrated or rated below BBB- (or equivalent). A maximum allocation of 10% to listed property is allowed. The strategy may make use of derivatives for efficient portfolio management.
Coronation is a long-term, valuation-driven investment house. Our aim is to identify mispriced assets trading at discounts to their fair value through extensive proprietary research. The fixed income portfolios are positioned on a long term strategic market view, but this is balanced by taking advantage of shorter-term tactical opportunities when the market lags or runs ahead of that strategic view. As active managers, we consider investment decisions across the full spectrum of potential return enhancers. These include duration and yield curve positions, inflation-linked assets as well as yield enhancement through credit enhanced assets. We aim to maximise returns by actively combining both a top-down and a bottom-up approach to portfolio construction.
*110% of Secured Overnight Financing Rate (SOFRINDX Index) from 01 December 2021. Previously 110% of ICE LIBOR USD 3 Month (US0003M Index).
The value of investments may go down as well as up, and is therefore not guaranteed. Past performance is not necessarily an indication of future performance.
| CUMULATIVE PERFORMANCE | |||||
|---|---|---|---|---|---|
| 1 MONTH | 1 YEAR | 3 YEARS | 5 YEARS | SINCE INCEPTION | |
| Strategy | 0.3% | 6.2% | 2.8% | 2.9% | 3.1% |
| Benchmark* | 0.5% | 5.9% | 2.8% | 2.3% | 1.5% |
| Difference | (0.2)% | 0.3% | 0.0% | 0.6% | 1.6% |
| CALENDAR YEAR PERFORMANCE | |||||
|---|---|---|---|---|---|
| YEAR TO DATE | 2023 | 2022 | 2021 | 2020 | |
| Strategy | 0.9% | 6.5% | (0.4)% | 1.9% | 2.1% |
| Benchmark* | 1.0% | 5.6% | 1.8% | 0.2% | 0.7% |
| Difference | (0.1)% | 0.9% | (2.2)% | 1.8% | 1.3% |
*110% of Secured Overnight Financing Rate (SOFRINDX) Index. Previously 110% of ICE LIBOR USD 3 Month (US0003M Index).
The value of investments may go down as well as up, and is therefore not guaranteed. Past performance is not necessarily an indication of future performance.