|
|
STANLIB US Dollar Cash Fund - News
|
|
|
|
|
Stanlib US Dollar comment - Sep 19
|
|
Monday, 9 December 2019
|
Fund Manager Comment
|
The US Dollar cash fund returned 0.40% for the third quarter of 2019 and 1.33% for the year to date. The fund aims to maintain capital value and liquidity while producing a return for investors in line with money market rates.
The $7.6 million Fund, managed by Fidelity International, invests in a diversified range of high quality short-term instruments including certificates of deposit, promissory notes, commercial paper, floating rate notes, discount notes, corporate bonds and mortgage backed securities. Investments will have a credit quality consistent with maintaining Moody's Aaa rating and a rating of AAA by Standard & Poor’s for the fund.
Macroeconomic indicators were mixed in the US. The US GDP came in at 2.0% in the second quarter, unchanged from preliminary estimate, and lower than the 3.1% expansion reported in the first quarter. Investor sentiment also took a hit after the US manufacturing gauge contracted for the first time in three years. The Institute for Supply Management’s (ISM) Purchasing Managers’ Index fell to 49.1 in August. The group’s gauge of new orders dropped to a more than seven-year low, while the production index hit the lowest level since late 2015. Consequently, the US Federal Reserve (Fed) cut interest rates twice over the quarter by 0.25 percentage points each. Government bond yields slumped to record lows amid renewed fears over a trade war and as the Fed adopted an accommodative monetary policy stance.
Meanwhile, the University of Michigan’s consumer sentiment index gained slightly towards the end of the quarter and came in at 93.2, driven by favourable income trends. This was after it fell from 98.4 to 89.8 between July and August, marking the largest monthly decline since 2012, as the US trade tariff policies, which are subject to repeated reversals and an on-going overhang of higher future tariffs, dented consumer sentiment.
The fund continues to focus on high quality issuers, with about 45% invested in entities rated Aa3 or higher. The fund’s weighted average maturity was decreased to 40 days from 49 days previously. The fund continues to invest mainly in commercial paper and certificates of deposit with investment companies and banks.
|
| |
|
Stanlib US Dollar comment - Mar 16
|
|
Tuesday, 14 June 2016
|
Fund Manager Comment
|
Fund Review
The fund returned -0.05% in the three months to end March 2016. Over the year to end March the return was -0.4%. Ever since the Recession, interest rates have been so low that the fund’s investments are unable to produce a return that exceeds the cost of managing/administering the fund.
Your fund, managed by Fidelity Worldwide Investment, aims to provide a return in line with money market rates, with capital preservation and liquidity being the primary considerations. The fund is a triple A rated stable net asset value liquidity fund. The rating is the highest possible money market rating of Moodys and Standard & Poors. The fund has a weighted average maturity of 43 days of the money market instruments in its portfolio, which typically range between thirty to forty different issuers
Looking Ahead
The dollar finally started to depreciate a bit against most currencies during the first quarter of 2016, after thumping all these currencies for some time. A strong dollar is bad for the US economy, hurting exports and has also caused imported inflation in many of the emerging market economies.
Against the all-important second biggest currency, the euro, the dollar lost about -4.8% in the quarter to end March and -5.1% in the year to end March. However, it remains in the trading band it has been stuck in for the past 15 months, namely $1.06 to $1.15 (currently $1.126). Should it break out on either side, then we could get a run. Hopefully for the world it will be on the weaker side.
|
| |
|
Stanlib US Dollar comment - Jun 14
|
|
Monday, 15 September 2014
|
Fund Manager Comment
|
Fund Review
The fund returned -0.36% in the six months to end June after a 2nd quarter return of -0.18%. At least the negative returns have declined a bit after STANLIB reduced its fees.
Your fund, managed by Fidelity Worldwide Investment, is a triple A rated stable net asset value liquidity fund, with a focus on security and diversification of risk, whilst delivering a return in line with money market rates. The rating is the highest possible money market rating of Moodys and Standard & Poors. The fund, $6.6bn in size, does not use derivatives and has not experienced any negative returns to date, including during the mighty 2008/9 stock market crash and great recession.
The fund has a weighted average maturity of 48 days of the money market instruments in its portfolio, which typically range between thirty to forty different issuers.
Looking Ahead
Most forecasters have been betting on a stronger dollar, because of the stronger US economy than most others and therefore the likelihood that the US would be the first to eventually raise interest rates.
So far the dollar has gained 1.1% against the euro during 2014, but has lost 3.5% against the powerful pound. In fact, the dollar is at a new six year low versus the pound. Admittedly the UK economy is strong too, having grown at 3% year-on-year in the first quarter.
Usually the US dollar tends to weaken when investors are in a risk-taking mood because they then tend to invest funds in other parts of the world. At this stage it is probably fair to expect the dollar to gain further against the euro but not the pound.
|
| |
|
Fund Name Changed
|
|
Thursday, 22 July 2010
|
Official Announcement
|
The STANLIB Offshore US Dollar Fund will change it's name to STANLIB US Dollar Cash Fund, effective from 22 July 2010
|
| |
|
Standard Bank US Dollar comment - Dec 04
|
|
Thursday, 17 March 2005
|
Fund Manager Comment
|
The Manager commenced the period with the portfolio's Weighted Average Maturity (WAM) positioned at 47 days. This was lengthened in October and November as further tightening was priced into the market. As the quarter progressed, the Manager found the six month segment of the curve more attractive as the market factored in further interest rate hikes during 2005. At the end of December, the portfolio's WAMstood at 43 days.
Recently implemented a barbell strategy, focusing on the one and six month segment of the market to take advantage of the steep yield curve
|
| |
|
|
