Standard Bank Money Market comment - September 02 - Fund Manager Comment28 Oct 2002
Despite the increasing interest rate environment the fund managed to maintain top half performance over the quarter as well as the year. The fund continued to grow during the quarter, and ended the quarter at R10.5bn, to maintain the position as second largest fund in the category.
The duration of the fund was kept at a shorter average than the average of its universe for the quarter in anticipation of further interest rate hikes, which materialised in September.
The risks for interest rates remain on the upside, with continued higher food and oil prices putting pressure on inflation. Expected CPIX for 2003 as well as 2004 is expected to be above the inflation target ranges. Money market rates continued to rise over the past few weeks, largely due to the SARB draining liquidity from the market. The risks for the rand remain high as global growth is slowing and foreign sales of securities increasing, in the absence of capital inflows.
We will continue to keep the fund 's duration short until the inflation cycle is perceived to have peaked and interest rates become more stable.
Standard Bank Money Market comment - June 2002 - Fund Manager Comment21 Aug 2002
The fund continued to grow during the quarter under review and ended the quarter at R 9.8bn.The performance of the fund was enhanced by the relative short duration of the fund.
The duration of the fund was kept relatively short of the index in anticipation of the MPC increasing interest rates in June. The market started to anticipate the rate increase late in April and the yield curve started to move upward. The slope of the curve flattened during the quarter indicating that the cycle is nearing a peak.
Inflation is expected to peak at the end of the third quarter. The MPC is expected to maintain their hawkish tone through the wage negotiations and interest rate risk, remain on the upside. The fund managers will therefore remain cautious and keep duration short of the index.
Duration: 84 days
Standard Bank Money Market comment - April 2002 - Fund Manager Comment12 Jun 2002
The SARB surprised the market by hiking short-term interest rates by 100 basis points on the 15th of January. This can be seen as an attempt to bolster their credibility and demonstrate their commitment to the inflation target. The inflationary effects are cost-push rather than demand-pull and higher interest rates will have little impact on inflation. The aggressive nature of the move indicates a more hawkish approach by the SARB and points to tighter monetary policy. This was confirmed by a further 100 basis points in March, and the risk of higher short term interest rates remains on the upside, as inflation is expected to only peak later in the year.
The fund manager will therefore keep the duration on the funds short of benchmark to benefit from any further increases in short term interest rates.
Standard Bank Money Market comment March 2002 - Fund Manager Comment17 May 2002
The SARB surprised the market by hiking short term interest rates by 100 basis points on the 15th of January. This can be seen as an attempt to bolster their credibility and demonstrate their commitment to the inflation target. The inflationary effects are cost-push rather than demand-pull and higher interest rates will have little impact on inflation. The aggressive nature of the move indicates a more hawkish approach by the SARB and points to tighter monetary policy. This was confirmed by a further 100 basis points in March, and the risk of higher short term interest rates remains on the upside,as inflation is expected to only peak later in the year.
The fund manager will therefore keep the duration on the funds short of benchmark to benefit from any further increases in short term interest rates.