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Absa Investments is proud to announce that the Absa Core Income Fund has passed a significant milestone with over R15 billion in assets under management (AUM).

The fund, managed by James Turp who is also the Head of Absa’s Fixed Income Franchise, was launched in October 2016. According to Turp, the Core Income Funds’ growth is the accumulation of a number of factors. “Strategically, we knew that this short term segment of fixed income had the potential for strong growth when the fund was launched. This is a segment which has also benefitted from the current environment of risk aversion. What we did not fully appreciate however, was how breaking into this competitive arena is not as easy as just showing up with a fund. Growing assets requires institutional synergies and hard work, top performance and a compelling and demonstrable investment process neatly packaged and taken to market through a strong and effective distribution team and platform.”

The fund's performance is a reflection of “the experience within the investment team, a strong market presence, constant research and an active management style,” says Turp, adding that sticking to the investment philosophy and process is crucial. Since inception, the Core Income Fund has returned an annualised 9.36% (before fees) beating its benchmark by 2.16%. “Our aim remains to provide a unique proposition that will be appreciated by, and be beneficial to our clients,” continues Turp.

 

Source: Morningstar, 31 August 2020

About the Absa Core Income Fund

The Absa Core Income Fund aims to provide investors with a higher level of current income than traditional money market collective investment scheme portfolios, while ensuring capital preservation over rolling periods and liquidity. The fund is currently positioned to benefit from a possible protracted low rate environment. It predominantly invests in interest bearing and non-equity securities in liquid form.

Given the current economic outlook and the damage that the lockdown has already had on South Africa’s potential growth rate, what’s the likely impact on the performance of the fund going forward? “We have an investment target that aims to achieve a higher yield than money market funds with an aim to reward investors’ investment term, a pledge we have consistently achieved. This remains our objective and we will be sticking to our task. Investors are urged to remain calm through this period of low economic growth and low interest rates and focus on capital stability. When the investment environment improves, it is something one can be a few months late for,” concludes Turp.

With the first four years almost behind us and building on its track record, we are confident the fund remains well positioned to meet the investment needs of our clients in this income segment.