The Ampersand BCI Income Fund aims to secure a higher return than that of a traditional money market or pure income fund and focus on protection against capital loss for investors.

Regulation 28
Maximum equity 10% of the portfolio’s net asset value
Maximum 25% property exposure

The Ampersand BCI Income Fund will change it's name to Ampersand BCI Income Fund, effective from 25 August 2023

The fund switched Management Company from Sanlam Collective Investments to Boutique Collective Investments (RF) (Pty) Ltd. on 25 Aug 2023

The fourth quarter of 2022 brought some reprieve to a year which investors would rather want to forget about. Both local and global assets recovered substantially from the poor performance in the third quarter. Despite 2022 recording major equity market sell-offs across the globe, it would be remembered for the worst calendar year bond market performance in decades. Since the 1920’s, there has only been 1 calendar year where the US 10 year delivered a double-digit negative return which amounted to 11,1% (2009). The US 10-year ended 2022 down more than 15%.

During 2022, the combined impact of Covid-19 on global trade and the Russian invasion of the Ukraine sent commodity prices through the roof. Unsurprisingly, inflation surged to levels not seen in nearly 4 decades. The aftermath was nothing short of extraordinary as the aggressive interest rate hiking cycle sent bond and equity markets into a tailspin. The fourth quarter did see a strong recovery though, with both global bonds and equities recovering.

International developments
The Annual inflation rate in the US slowed for the 5... consecutive month, posting 7,1% (below the expected 7,3%) annualised at the end of November. The US inflation rate and the Federal Reserve hiking interest rates continued to be the dominant drivers of global market performance over the quarter and will continue to do so in 2023.

South Africa
The ANC elective conference held in December 2022 concluded with the re-election of Cyril Ramaphosa as party president. Not surprisingly the outcome was received with little if any impact on local markets, again showing just how international economic and political trends trump local ones. Inflation seems to be cooling in the local economy and a weaker USD and lower energy prices may help soften prices in the coming months. 2022 saw a significant reversal in the 2020 Covid-induced repo rate cuts, with the last MPC meeting of the year leading to another 0,75% hike in the repo rate to 7%. The prime lending rate now stands at 10,5%.

Position going forward and conclusion
Over the quarter the Ampersand funds have delivered returns well ahead of benchmark. This was to be expected due to the market recovery, but also due to the largely passive nature of our underlying portfolios. Bear markets are followed by recoveries and we do not see why it would be different this time around. The nature and timing of the recovery is the uncertain variable, not the occurrence itself. It is very likely that some of the large developed economies will enter technical recessions this year which will lead to more volatility, especially in equity markets around the globe.