The first quarter saw another two interest rate hikes, which had a positive effect on fund returns for the period.

Towards the end of the last quarter of 2015, the fund had an extremely low exposure to interest bearing assets. This carried over to the first part of this year and led to lower average cash reserves for the first quarter in comparison to the previous quarter (despite a R200 million growth in average fund size).

After-tax returns for investors improved during the quarter, as a result of the interest component being low, coupled with the two rate hikes. Consequently, the fund’s marginal outperformance of its benchmark widened slightly.

There was very little movement in investment holdings over the period, one asset redeemed right at quarter end in anticipation of investment in more attractive assets.