Inflation-Linked Bonds

The Futuregrowth Passive ILB Index Composite aims to match the returns of the benchmark through passive interest rate and yield curve management.

For more information on this fund, please email fundinfo@futuregrowth.co.za.

The benchmark is the JSE ILB IGOV Index.

Objective

The Composite seeks to match the JSE ILB IGOV Index.

Composition

The Composite invests in constituents of the JSE ILB IGOV Index.

The Futuregrowth Core ILB Composite aims to deliver excess return through active interest rate risk management, appropriate yield curve positioning and exposure to higher yielding non-government inflation-linked bonds.

For more information on this fund, please email fundinfo@futuregrowth.co.za.

The benchmark is the JSE ILB IGOV Index.

Objective

The Composite seeks to outperform the JSE ILB IGOV Index.

Composition

The Composite invests in cash and inflation-linked bonds issued by the RSA-government, state owned enterprises and the corporate sector.

Yield Enhanced Strategy

Our yield enhanced strategy relies on maintaining strong relationships with market players. This allows us to see a large degree of dealflow on a continuous basis and keep an eye on ever-evolving credit events in the market. In the unlisted space, our specialist structuring skills allow us to make loans that ensure lenders achieve the greatest degree of investor protection through loan terms, covenants and security while ensuring risk-adjusted returns with good diversification.

The Futuregrowth Yield Enhanced Long Duration ILB Composite targets high cash returns through active interest rate risk management (real and nominal), active yield curve bets and moderate credit concentrations.

For more information on this fund, please email fundinfo@futuregrowth.co.za.

The Composite is suitable for clients wishing to have exposure to inflation-linked bonds while retaining access to yield-enhanced returns. The benchmark is the Barclays SAGILB 15+ Total Return Index.

Objective

The Composite seeks to outperform the Barclays SAGILB 15+ Total Return Index by 1% per annum over a rolling 3-year period.

Composition

The Composite invests in a wide range of government, parastatal, corporate debt and securitised assets, subject to credit committee approval, and whose relative value is expected to increase over time. The Composite is converted from nominal to real through an inflation linked bond overlay. The Composite has an allowance to invest up to 50% in unlisted credit.

Yield Enhanced Strategy

Our yield enhanced strategy relies on maintaining strong relationships with market players. This allows us to see a large degree of dealflow on a continuous basis and keep an eye on ever-evolving credit events in the market. In the unlisted space, our specialist structuring skills allow us to make loans that ensure lenders achieve the greatest degree of investor protection through loan terms, covenants and security while ensuring risk-adjusted returns with good diversification.

The Futuregrowth Power ILB Composite, an investment portfolio specialising in energy-related industries and sectors, forms part of Futuregrowth’s suite of developmental investments.

For more information on this fund, please email fundinfo@futuregrowth.co.za.

As a stand-alone investment, the Composite is not Regulation 28 compliant. The benchmark is the RSA Inflation Linked Government Bond I2038.

Objective

The Composite aims to outperform the I2038 by 2.25% per annum before the deduction of taxes and fees and with income reinvested over a rolling 3-year period.

Composition

The Composite buys units in the Futuregrowth Power Debt Fund. The underlying nominal interest rate risk in the Power Debt Fund is hedged via derivatives to give the Composite inflation-linked exposure. Please note that there will never be any double dipping of fees.

The Power Debt Fund, which invests in energy related industries and sectors, is largely invested/committed to invest in renewable energy deals that form part of the Department of Energy’s Renewable Energy Independent Power Producer Procurement Programme (REIPPPP). These include investments in solar photovoltaic (PV), concentrated solar power (CSP) and wind farms. Projects approved so far are located in the Northern Cape, Eastern Cape and Limpopo Provinces. All projects under the REIPPPP enter into an off-take purchase agreement with Eskom for power they will produce during the next twenty years and these revenue streams will be used by the projects to repay the debt finance.

The Power Debt Fund has fairly high risk and concentration limits, and is not intended to be highly liquid given that the underlying transactions are unlisted, unrated and have relatively few co-creditors. The Composite will maintain a minimum of 5% in I2038 bonds to facilitate transactions and/or client cash flow needs.

Social Impact

The Power Debt Fund aims to provide investors with a vehicle that facilitates infrastructural, social, environmental and economic development in southern Africa through investments in energy related businesses and sectors. These include electricity generation from renewable, alternative and traditional sources, power distribution and reticulation, and supporting industries and sectors. The Power Debt Fund delivers on a variety of social impact requirements such as sustainable energy, job creation, skills transfer, Black Economic Empowerment (BEE), community upliftment and promotion of SMMEs.

The Futuregrowth Infrastructure & Development ILB, a specialist yield enhanced bond portfolio, forms part of Futuregrowth’s suite of developmental investments.

For more information on this fund, please email fundinfo@futuregrowth.co.za.

The Fund targets high cash returns through a combination of active, real and nominal interest rate risk management and yield enhancement by investing in listed and unlisted socially responsible and developmental assets. As a stand-alone investment, the Fund is not Reg. 28 compliant. The benchmark is the Barclays BESA SAGILB 15+.

Objective

The Fund aims to outperform the SAGILB 15+ by 1% per annum before the deduction of taxes and fees and with income reinvested over a rolling 3-year period.

Composition

The Fund buys units in the Futuregrowth Infrastructure & Development Bond Fund (IBF). The underlying nominal interest rate risk in the IBF is hedged via derivatives to give the Fund inflation-linked exposure. Please note that there will never be any double dipping of fees.

The IBF, which invest in infrastructural, social, environmental and economic development sectors, may invest in a wide range of debt instruments including those issued by government, parastatals, corporates as well as securitised assets. The inclusion of assets is subject to credit committee approval. The IBF is allowed to invest up to 50% in unlisted credit and in addition, to invest in up to 5% equity assets (primarily through the Futuregrowth Development Equity Fund) subject to investment committee approval. The resulting effect is good risk-adjusted alpha generation over time.

In order to retain adequate liquidity and flexibility, and in the course of managing new investments, asset maturities and sales, and fund-flows, the IBF usually maintains a high degree of liquid and/or non-developmental assets. This facilitates transactions and/or client cash flow needs.

Social Impact

The IBF aims to provide investors with a vehicle that facilitates infrastructural, social, environmental and economic development in southern Africa and delivers on a variety of social impact requirements such as job creation, affordable housing, access to services and healthcare.