No matter how you complete that sentence (“The rand is going to …”), one of the most important responses is to inject exposure to the US dollar into your portfolio. But how? It may sound intimidating.
In fact, whatever your personal strategy, there are products that make implementation easy. A single exchange traded fund (ETF) can give you seam-free access to highly liquid, highly rated US government debt.
Our 1nvest ICE US Treasury Short Bond Index Feeder ETF is designed to do just that. By purchasing the Johannesburg Stock Exchange (JSE) listed product, you become the proud owner of US government bonds, bills and notes – without using your single discretionary allowance or your foreign capital allowance. Our feeder ETF achieves this by tracking the ICE US Treasury Short Bond Index.
There are other benefits, too. When US interest rates were near zero, this ETF mimicked the rand-dollar exchange rate with impressive accuracy. However, now that US rates have risen, investors gain the added benefit of that yield. Currently, that is 4% to 5%.
This interest rate differential also puts added pressure on the rand. All else being equal, that is an added benefit of introducing dollar exposure to a portfolio.
Of course, attempting to time movements in the rand’s value, in US dollar terms, is risky business – especially in times of political uncertainty. The 1nvest ICE US Treasury Short Bond Index Feeder ETF is designed for investors who appreciate the value of time in the market rather than timing the market.
If this diversification by dollars could benefit you, read more about our 1nvest ICE US Treasury Short Bond Index Feeder ETF.
Collective Investment Schemes (CIS) are generally medium- to long-term investments. The value of participatory interests may go down as well as up. Past performance is not necessarily a guide to future performance. CIS are traded at ruling prices and can engage in borrowing and scrip lending. A schedule of fees and maximum commissions is available on request from the manager. The manager does not provide any guarantee with respect to the capital or the return of a CIS portfolio. These portfolios are third-party-named incubator portfolios. The manager retains full legal responsibility for these portfolios.
1nvest Fund Managers (Pty) Ltd is an authorised financial services provider (FSP), FSP No. 49955, under the Financial Advisory and Intermediary Services Act (FAIS), Act No. 37 of 2002. The manager of the Schemes is STANLIB Collective Investments (RF) Pty Ltd and registered in terms of CISCA. For the basis and information on awards and rankings, please contact [email protected].
