Page 179 - Profile's Unit Trusts & Collective Investments - September 2025

Fund manager interviews Chapter 9

Inflation-linked securities, on the other hand, are designed to protect against inflation by adjusting
their principal and interest payments based on inflation rates. This feature ensures that the real
value of the investment is preserved, making them an excellent choice for long-term investors
concerned about rising prices. As inflationary pressures continue to impact the global economy,
these securities become increasingly valuable, offering both income and protection.
In conclusion, incorporating nominal government bonds and inflation-linked securities into a
diversified portfolio can provide a balanced approach to managing risk and maximising returns. By
leveraging the inherent strengths of these asset classes, investors can achieve a robust and resilient
investment strategy that stands the test of time.
Give your views regarding interest rate trends and the yield curve over the next 1 to 2 years.
What interest rates can investors expect? Do you anticipate further repo rate cuts?
Although we continue to experience relatively high real interest rates in South Africa, the central
bank’s ability to make adjustments will heavily depend on the trajectory of inflation. The longer end of
the yield curve is more influenced by international rates and supply and demand dynamics. While low
inflation currently provides support, any increase in this low inflation environment could adversely
affect the longer end of the curve. Additionally, offshore rates and rising overall government debt
may exert further pressure on the longer end.
In the context of the current economic landscape, it is essential to consider various factors that
could impact interest rates and the yield curve. The central bank’s decisions will be closely tied
to inflation trends, and any shifts in inflation could prompt adjustments in monetary policy. This
dynamic highlights the importance of staying vigilant and adaptable in our strategies.
Furthermore, the interplay between international rates and domestic supply and demand cannot
be ignored. Global economic conditions and foreign interest rates will continue to shape the longer
end of the yield curve. As these factors evolve, they will influence the cost of borrowing and the
returns on fixed-income assets.
Moreover, the rising overall government debt adds another layer of complexity. Increased debt
levels can lead to higher yields as investors demand greater compensation for the perceived risk.
This scenario underscores the need for a comprehensive and proactive approach to managing our
investments, ensuring that we are well-positioned to navigate the challenges and opportunities that
lie ahead.
_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
Methodical BCI Equity Fund
Sector: South African–Equity–General
Portfolio managers: Edo Brasecke and Charl Keet
Benchmark: ASISA SA Equity General sector average
Returns to investors 1 year 3 years
Methodical BCI Equity Fund 21.79% 17.36%
Sector Average 18.59% 13.65%
Inflation (CPI) 3.02% 4.49%
ProfileData performance stats to 30 June 2025: CAGR with dividends reinvested

Describe your investment universe
„ Local Equity Universe:
Top 100 most liquid shares trading on the JSE All-Share index, irrespective of market cap.
„ Global Equity Universe:
Top 400 most liquid shares trading on all US exchanges, irrespective of market cap.
„ Offshore Allocation:
Although current regulations allow up to 45%, our allocation is allowed to drift strategically rather

Profile’s Unit Trusts & Collective Investments September 2025 177