Pointbreak Money Market Fund cash reserves increase amid grim economic environment
In light of current economic uncertainties and market conditions the Pointbreak Money Market Fund has increased its cash reserve to just over 20% of the fund from an average of 15%, said executive chair of Pointbreak Wealth, Tony Edmunds.
“Capital preservation and liquidity will always take precedence over chasing yield. Apart from this slightly more defensive stance the investment strategy has not changed and is consistently applied” Edmunds said.
The fund, which has a primary objective of providing money market returns with 24-hour liquidity, with capital preservation and liquidity taking precedence over the maximization of yield. To date the Pointbreak Money Market Fund yield has dropped by 0.55% over the comparable three-month period and Pointbreak forecasts that under the current market conditions yield should experience a gradual decrease over the next few months.
The fund only invests with the four major banking groups in Namibia, five major banking groups in South Africa, Namibia Savings Bank (Nampost) and the Sovereign’s of both countries, as well as other large Money Market funds.
With inflation in Namibia at 1.6% per year, the fund currently offers a real return of over 3%. For the first time in a long time the Money Market fund which gives a return of 6.30% per year (6.10% nacm) offers a higher return than Treasury Bills (5.20% per year). Treasury Bill rates are however fixed for 12 months while money market rates change daily and is expected to reduce over the next few months.
The fund is managed by Ashburton Unit Trust Management Company Ltd, which is a member of the FirstRand Namibia Group and remains suitable for investors seeking a low risk investment that earns competitive money market income whilst preserving capital.