The Fuh Hwa South Africa Short-Term Income ZAR Fund seeks stable income and long-term capital appreciation by investing in short-term investment-grade bonds and has been a consistent performer since its launch in 2012.

The fund aims to participate in South African paper’s relatively high-yield portfolio through a diversified portfolio of short-term debt issued by government, quasi-government agencies, and policy banks.

The fund’s investment process uses top-down, macroeconomic analysis considering factors such as GDP growth, current account position, debt levels, and credit growth. The manager conveyed a deep understanding of local market conditions and how interrelated domestic issues such as farming yields, electricity price adjustment mechanisms, and exchange rate inflation transmission impact the interest-rate curve. These considerations determine how duration is adjusted across the portfolio, typically between one to three years.

It is a comparatively concentrated portfolio with less than 30 holdings and not actively traded with less than 20% turnover in the past three years.

The fund has delivered a strong performance with relatively little volatility with net returns of more than 301 points above the benchmark on a 1Y, 3, 5Y, and 7Y period.

This fund has been reviewed by three industry veterans of the Benchmark judging committee.