MULTI-ASSET FUNDS Prescient Income Plus Fund
Prescient Income Plus Fund
Investment and Return Objective
The Fund aims to return STeFi Call + 3% per annum through a full interest rate cycle. It intends to provide investors with enhanced income yield while maintaining constrained credit risk exposure that will not place undue risk on the capital perseveration. The fund introduces high diversification across high yielding assets and high quality liquid assets.
Who Should Invest
Investors seeking performance in excess of cash and a typical income funds. The fund is managed in compliance of CISCA BN90 guidelines. Potential investors should have a marginally high tolerance for risk for the higher expected income yields.
The Fund will invest in a diversified portfolio consisting primarily of South African vanilla debt, mezzanine and structured instruments across the term structure and credit rating bands. Portfolio risk is managed at both single obligor and portfolio level. The former is done through an inhouse dynamic probability of default (PD) based rating model and the latter is through measuring the Expected Loss (EL), Loss Given Default (LGD) and credit VaR (Value at Risk); both of which are monitored over time. The maximum modified duration risk that the fund can take is 2yrs. Credit asset selection is underpinned by minimisation of default risk and credit spread duration.
Risk Indicator = Moderately Conservative
Risk Indicator Definition
These portfolios typically have moderate equity exposure or in the case of bond funds, longer duration bond exposure, resulting in some capital volatility over the shorter term. They are managed in such a manner that the probability of capital losses over one year periods is unlikely. These portfolios typically target returns in the region on 3% - 4% above inflation before tax over the long term.