A premier fixed income range

Combined offering of eight fixed income funds

As a result of the Momentum and Metropolitan merger last year, the Momentum Collective Investments fixed income offering will be supplemented by the addition of the Metropolitan Inflation Linked Bond Fund, if investor ballots are approved. The combined offering of eight fixed interest funds will give investors unique propositions. The funds have different return drivers and investors need to assess the likely inflation and interest rate backdrop together with their personal risk profile. Elevated global market volatility and the low risk tolerance of many investors may advocate the use of these fixed interest solutions in investment portfolios. Click here to download this article in PDF format.


Traditional money market, bond and income funds

The Momentum Money Market Fund, Momentum Maximum Income Fund and Momentum Bond Fund have built strong track records since 1999 (Money Market) and 1995 (Momentum Maximum Income Fund and Momentum Bond Fund). They are categorised in sectors where peers have the same mandates and are generally well known to advisers and investors.

Fund information as at 31 October 2011
Fund fact sheet Fund manager commentary Portfolio holdings
Momentum Money Market Fund >>Click here<< >>Click here<< >>Click here<<
Momentum Maximum Income Fund >>Click here<< >>Click here<< >>Click here<<
Momentum Bond Fund >>Click here<< >>Click here<< >>Click here<<

The Momentum Enhanced Yield Fund [previously Momentum Cash Management Fund]

The Momentum Enhanced Yield Fund retains many of the characteristics of a typical money market fund, but a more flexible mandate increases the universe of investable securities and allows value add through term/liquidity premia. The fund has grown to over R6 billion since its launch in 2008 and managed to deliver on its mandate of outperforming the top quartile money market funds. (This fund is only available through the Momentum Wealth investment platform).

Fund information as at 31 October 2011
Fund fact sheet Fund manager commentary Portfolio holdings
Momentum Enhanced Yield Fund >>Click here<< >>Click here<< >>Click here<<

A flexible option

The Momentum Diversified Yield Fund is a fund which has flexibility and no limits in terms of duration. Investors are to be balloted to allow for the inclusion of property, preference shares and offshore holdings. This will allow for diversification and allow the fund manger to target returns in a wider array of assets.

Fund information as at 31 October 2011
Fund fact sheet Fund manager commentary Portfolio holdings
Momentum Diversified Yield Fund >>Click here<< >>Click here<< >>Click here<<

Focus on credit

The Momentum Income Plus Fund is distinctive in its strategy of targeting credit premiums in fixed-interest instruments, without any significant duration. As a consequence, price volatility is relatively low at most times. The fund holds diversification benefits given its low correlation with other asset classes.

Fund information as at 31 October 2011
Fund fact sheet Fund manager commentary Portfolio holdings
Momentum Income Plus Fund >>Click here<< >>Click here<< >>Click here<<

Protection against unexpected inflation

The Metropolitan Inflation Linked Bond Fund offers protection against unexpected increases in inflation.

Fund information as at 31 October 2011
Fund fact sheet Fund manager commentary
Metropolitan Inflation Linked Bond Fund >>Click here<< >>Click here<<

Multi-strategy approach

The Momentum Opportunity Income Fund (previously Metropolitan Income Plus Fund) aims to deliver a compelling risk/return profile to investors. A diverse investment universe linked by common themes/drivers is utilised to achieve this risk/return profile. The fund targets incremental yield using different strategies across asset classes with capital stability as its core objective. Emphasis is on exploiting pricing inefficiencies in any of the asset classes. Since its inception in June 2008 the fund has managed to outperform CPI+4% and risk-adjusted returns provides a competitive alternative to prudential low equity funds.

Fund information as at 31 October 2011
Fund fact sheet Fund manager commentary
Momentum Opportunity Income Fund >>Click here<< >>Click here<<

Performance

The table below depicts the above mentioned funds according to performance targets, risk and return drivers. You can also view the performance charts by clicking the links in the last column.

Core and aggressive cash

Duration and credit

Alternative strategies

RISK

RISK Different risk drivers
Momentum Money Market Fund Momentum Enhanced Yield Fund Momentum Maximum Income Fund Momentum Diversified Yield Fund Momentum Bond Fund Metropolitan Inflation Linked Bond Fund Momentum Income Plus Fund Momentum Opportunity Income Fund

Performance target

STeFI+50bp STeFI+100bp STeFI+150bp STeFI+200bp ALBI+100bp STeFI+300bp STeFI+200bp
Return drivers level of short-term interest rates, credit spreads changes in level of interest rates, credit spreads inflation expectations, changes in real yields investment grade and speculative credit, structured credit (significant allocation) multi-strategy approach, seeks value across asset classes
Risk Credit defaults, but limited by diversification across issuers and minimum short-term rating (F1). Duration limits (instrument term < 1 year, fund duration < 90 days) further reduce probability of capital losses. Credit defaults, but limited by diversification across issuers and minimum short-term rating (F2), long term A- . Duration and targeted term limits (instrument term < 3 year, fund duration < 180 days) reduce probability of capital losses. Interest rates rising (especially unexpectedly), but duration limit of (0-2 years) limits possibility of severe capital losses. Credit defaults -reduced with diversification across issuers. Interest rates rising - especially unexpectedly.
Credit defaults.
Interest rates rising - especially unexpectedly.
Credit defaults.
A rise in real yields will result in capital losses. Opportunity cost of inflation lower than expected. Credit default (higher with speculative allocation). Significant widening in credit spread due to event risk. Credit risk. Event risk that leads to equity, currency, commodity volatility and/or widening credit spreads.
Performance chart << Core and aggressive cash >> << Duration and credit >> << Alternative strategies >>
Momentum Collective Investments (RF) (Pty) Ltd (registration number 1987/004287/07, VAT number 4870151091).

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