AN INCOME FUND THAT’S IDEAL FOR SHORT-TERM ESSENTIAL GOALS

Goals differ in terms of their importance, whether the goal is essential or aspirational in nature, when the money is needed, whether the specifications of the goal are fixed or whether there is some flexibility in the required outcome. The investor’s capacity for risk also differs dependent on their financial circumstances and the consequence an adverse investment outcome can have on their life. All these factors are important in determining the most suitable investment strategy that aligns the risk, return, and behavioural profile of the specific goal.

Finding the ideal investment solution for a client with a short-term essential goal can be very challenging. The essential nature of the goal means the investor cannot afford not to achieve their planned outcome. The challenge for the financial advisor is to find the ideal mix of asset classes that can offer the best possible return with the lowest probability of capital losses over a very short investment term.

At Amity Investment Solutions we’ve developed an investment solution that is aligned with such a short-term essential type of investment goal. After extensive research we found that most investors use a money market as their preferred investment for this type of goal because of the low risk of capital loss, and the return that is fairly predictable as the primary source of return is interest.

But would you consider a different alternative to a money market if we can prove that over time there are asset classes that consistently deliver better returns than a money market, and that these asset classes won’t increase the risk of capital losses of over any rolling 12-month period?

The Amity BCI Diversified Income fund was launched in December 2021 and is managed exclusively for Amity by Matrix Fund Managers.

The objective of this fund is twofold:

• to deliver a higher return than money market interest rates over a rolling 12-month period, and
• not to lose capital over any rolling 12-month period.

This fund is unique as it combines a diversified range of instruments which includes money market, short term flexible income instruments, inflation linked bonds, preference shares, and bonds. These instruments are used very selectively to ensure a higher level of interest income whist limiting any capital losses. We value the bottom-up approach and the macro overlay that Matrix applies when selecting and identifying the investment opportunities. Their disciplined risk management strategy is in line with our way of managing investments.

Their disciplined risk management strategy is in line with our way of managing investments, and we are excited to have the fund as part of our offering.