Cadiz Fund News – January 2025

CADIZ BCI MONEY MARKET FUND

The Cadiz Money Market Fund remained steadfast in its mandate, delivering returns in December that outperformed cash. The fund performed well throughout the year, benefiting from strategic positioning of assets to effectively navigate the interest rate cutting cycle. As rates began to decline, the fund successfully locked in higher yields without compromising liquidity and adhering to the risk parameters. Managed within its mandate constraints, the fund consistently outperformed its benchmark, the Alexander Forbes Short Term Fixed Interest (STeFI) Composite Index, while diligently maintaining adequate liquidity levels and minimising return volatility.

CADIZ BCI ENHANCED INCOME FUND

The Cadiz Enhanced Income Fund continued to leverage opportunities to invest in corporate bonds which contributed to enhancing the yield. While the fund delivered positive returns for the month, exposure to nominal bonds detracted from performance as this asset class posted negative returns during the period. Despite this, for the year, the fund maintained its long-standing record of low volatility returns, prioritising wealth growth and limiting downside risk. Trading activity during the month was minimal, guided primarily by cash flows and reinvestments, aligning with the fund’s objectives and upholding a prudent approach to portfolio management.

CADIZ BCI ABSOLUTE YIELD FUND

The Cadiz Absolute Yield Fund maintained its exposure to nominal and inflation-linked bonds, with nominal bonds detracting from performance for the month. Despite this, the fund delivered a robust performance over the year, with returns remaining positive over longer periods. The fund also retained diversified exposure to floating rate notes, which once again contributed positively by offsetting some of the negative returns from bonds. Trading activities during the month included deploying cash, reinvesting maturing instruments, and managing duration to align with the investment strategy and market outlook. The fund remains actively managed by the team to capitalise on opportunities and manage prevailing risks.

CADIZ BCI BOND FUND

The Cadiz Bond Fund remained committed to its objectives despite rising yields both locally and in advanced economies. The All Bond Index benchmark returned -0.35% in December. Similarly, the fund’s nominal government bond exposure detracted from performance for the month. Nevertheless, the fund delivered a robust performance over the full year, with returns remaining favourable over longer periods. The bond fund remains primarily invested in government bonds, with its duration and exposure levels strategically aligned with the current investment outlook.