Fixed Income Funds

Methodical Investment Management manages the Methodical FR Income Fund and the Methodical FR Dynamic Income Fund, both classified in the ASISA South African Multi-Asset Income category. The funds can invest across South African government and inflation-linked bonds, cash and money market instruments, corporate and bank credit, listed property (up to 25%), equities (up to 10%) and offshore assets within regulatory limits. We can invest in credit, but we favour liquid instruments so we can stay nimble and move quickly between asset classes as our views change.

Our process is macro-driven and research-led. We form an independent view on SARB policy, inflation and inflation expectations, and the global backdrop, and compare it with what markets are pricing. We express that view through asset allocation, duration, yield-curve positioning and the mix between nominal and inflation-linked bonds, testing positions against alternative scenarios so that no single view dominates.

The same process drives both funds; what differs is their return target and the latitude to take positions. The Income Fund targets STeFI + 1% a year, with a risk objective of no capital loss over any rolling three-month period. The Dynamic Income Fund targets STeFI + 2% a year and has greater flexibility to shift asset allocation and position actively across the yield curve, suiting investors with a higher tolerance for short-term movements in value.