Announcements Financial Institutions Fund Rating Alerts

GCR Reviews South African Fund Ratings under new criteria

Rating Action

Johannesburg, 27 November 2020- GCR Ratings (“GCR”) has reviewed the ratings on the following South African rated funds, under the new funds criteria.

Fund Name

Class

Scale

Rating Action

Rating

Outlook

Absa Core Income Fund

Fund Rating

National

Affirmed

AA(ZA)(f)

Stable

Absa Money Market Fund

Fund Rating

National

Affirmed

AA+(ZA)(f)

Stable

Ashburton Money Market Fund

Fund Rating

National

Upgraded

AA+(ZA)(f)

Stable

Ashburton Stable Income Fund

Fund Rating

National

Affirmed

AA-(ZA)(f)

Stable

BCI Money Market Fund

Fund Rating

National

Upgraded

AA+(ZA)(f)

Stable

Nedgroup Investments Core Income Fund

Fund Rating

National

Affirmed

AA(ZA)(f)

Stable

Nedgroup Investments Corporate Money Market Fund

Fund Rating

National

Affirmed

AA+(ZA)(f))

Stable

Nedgroup Investments Money Market Fund

Fund Rating

National

Affirmed

AA+(ZA)(f)

Stable

Nedgroup Investments Prime Money Market Fund

Fund Rating

National

Affirmed

AAA(ZA)(f)

Stable

Ninety One Corporate Money Market Fund

Fund Rating

National

Affirmed

AA+(ZA)(f)

Stable

Ninety One Money Market Fund

Fund Rating

National

Affirmed

AA+(ZA)(f)

Stable

Ninety One STeFI Plus Fund

Fund Rating

National

Affirmed

AA(ZA)(f)

Stable

Momentum Money Market Fund

Fund Rating

National

Affirmed

AA+(ZA)(f)

Stable

Old Mutual Institutional Short-Term Fund

Fund Rating

National

Affirmed

AA+(ZA)(f)

Stable

Prescient Corporate Money Market Fund

Fund Rating

National

Upgraded

AA+(ZA)(f)

Stable

Sanlam Alternative Income Fund

Fund Rating

National

Upgraded

AA(ZA)(f)

Stable

Sanlam Investment Management Enhanced Yield Fund

Fund Rating

National

Affirmed

AA-(ZA)(f)

Stable

Sasfin BCI Optimal Income Fund

Fund Rating

National

Upgraded

AAA(ZA)(f)

Stable

Southchester RF Limited

Fund Rating

National

Upgraded

AA(ZA)(f)

Stable

STANLIB Corporate Money Market Fund

Fund Rating

National

Affirmed

AA+((ZA)(f)

Stable

STANLIB Extra Income Fund

Fund Rating

National

Affirmed

AA-(ZA)(f)

Positive

In July 2020, GCR announced that it had released new criteria for rating funds. This methodology is titled Criteria for Fund Ratings. This criterion predominantly applies to fixed income funds, including money market and other funds with portfolios that invest primarily in debt and debt like securities. Fund ratings (“f”) are not credit ratings. Therefore, they do not measure the relative ability of a fund to repay principal and/ or interest in a timely manner. Rather, fund ratings indicate an opinion regarding the fund’s ability to preserve principal value under varying market conditions that may be affected by credit risk, interest rates, liquidity, as well as other market conditions.

As a result, all fund ratings were placed “Under Criteria Observation”. Subsequently, GCR has finalised the reviews under the new methodology. As a result, the fund ratings have been removed from ‘Under Criteria Observation’ and revised in line with the new methodology.

Rating Rationale

GCR has adopted its typical four (4) major rating components (in line with the wider GCR Ratings Framework). For fund ratings, these four components are Credit Quality, Maturity & Interest Rate Risk, Management Assessment, and Liquidity. Each component, for each fund rating, will have a public positive, negative or neutral score assigned to it. The summation of the scores determines the GCR Risk Score, which is translated using the country specific column on the GCR Anchor Credit Evaluator into the final rating. It is important to note that there are no fixed weightings for the components, factors or sub-factors.

Absa Core Income Fund: AA(ZA)(f) / Stable

The Absa Core Income Fund (“Absa CIF”, “the fund”) aims to deliver total returns exceeding those offered by money market funds. The mandate prioritises capital preservation, low risk and high liquidity, attracting retail and corporate/institutional investors with an investment horizon greater than six months. At the review date, the weighted average credit quality of the investment portfolio was 16.5, dominated by the five major banks (with the greatest concentration to ABSA Bank Ltd) and the domestic sovereign. We have made no negative adjustment for concentrations to the banks, as its common place in the South African market. The 12-month average weighted average maturity and duration are 227 days and 256days respectively, and therefore neutral to the rating. We consider the management and governance of the fund to be a neutral (best possible score) rating factor. Liquidity is appropriately managed against expected redemptions, despite some investor concentrations, with a significant pool of liquid investments and 13% of the portfolio on call.

Absa Money Market Fund: AA+(ZA)(f) / Stable

Absa Money Market Fund (“Absa MMF”, “the fund”) has a fixed income mandate executed in favour of its retail and institutional/corporate investors, which seeks to maximise interest income whilst preserving capital and offering same day liquidity. The fund complies with regulatory requirements for money market funds, its investment policy, and the trust deeds. At the review date, the weighted average credit quality of the investment portfolio was 16.25, dominated by the five major banks and the domestic sovereign. We have made no negative adjustment for concentrations to the banks, as it is common place in the South African market. Furthermore, diversification across the banks is fairly good. The 12-month average weighted average maturity and duration are 74 days and 99days respectively, and therefore provide a +1 uplift to the rating. We consider the management and governance of the fund to be a neutral (best possible score) rating factor. Liquidity is a neutral rating factor. Typical with income fund peers the fund has a same day liquidity period. The fund manages liquidity against expected redemptions, keeping c.5% – 10% of the portfolio on call and investing in inherently liquid instruments.

Ashburton Money Market Fund: AA+(ZA)(f) / Stable

We have upgraded the rating on Ashburton Money Market Fund (“Ashburton MMF”), to reflect the average credit quality of the underlying portfolio. Ashburton MMF has a fixed income mandate and aims to maximise interest income whilst preserving capital and offering high liquidity to investors. At the review date, the weighted average credit quality of the investment portfolio was 16.5, dominated by the five major banks and the domestic sovereign, but also with the branches of foreign owned banks. We have made no negative adjustment for concentrations to the banks, as it is common place in the South African market. Furthermore, diversification across the banks is fairly good. The 12-month average weighted average maturity and duration are 110days and 83days respectively, and therefore provide a +1 uplift to the rating. We consider the management and governance of the fund to be a neutral (best possible score) rating factor. Liquidity is a neutral rating factor. Although investor concentrations are quite high and the fund keeps a limited amount of the portfolio on call, the investments are inherently liquid.

Ashburton Stable Income Fund: AA-(ZA)(f) / Stable

The fixed income mandate of the Ashburton Stable Income Fund (“Ashburton SIF”) aims to deliver total returns exceeding those offered by money market funds. The fund’s objective is to maximise interest income whilst preserving capital and offering high liquidity. At the review date, the weighted average credit quality of the investment portfolio was 15.5. The funds is well diversified versus other rated peers split between the domestic banks (c60%), securitisation (25%) and corporates (15%). The 12-month average weighted average maturity and duration are 1025days and 41days respectively, and act as a slight restrain to the rating. We consider the management and governance of the fund to be a neutral (best possible score) rating factor. Liquidity is a neutral rating factor. Although a significant investor concentration exists, liquidity is appropriate for the fund profile.

BCI Money Market Fund: AA+(ZA)(f) / Stable

We have upgraded the rating on BCI Money Market Fund (“BCIMMF”), to reflect the average credit quality of the underlying portfolio. BCIMMF has a fixed income mandate which aims to obtain as high a level of current income as is consistent with capital preservation and liquidity. The fund caters to retail, corporate and institutional investors. At the review date, the weighted average credit quality of the investment portfolio was 16.5. The fund is relatively well diversified versus other rated funds split between the domestic banks (85%), foreign banks (5%), Securitisation (5%), SOEs (3%) and the South African government (3%). The 12-month average weighted average maturity and duration are 112days and 46days respectively and therefore uplifts the rating on the fund by 1. We consider the management and governance of the fund to be a neutral (best possible score) rating factor. Liquidity is currently a neutral rating factor, balancing low investor concentrations and liquid nature of the investment portfolio.

Nedgroup Investments Core Income Fund: AA(ZA)(f) / Stable

Nedgroup Investments Core Income Fund (“NEDCIF”) has a fixed income mandate which aims to deliver total returns exceeding those offered by money market (“MM”) funds. The mandate however still prioritises capital preservation, low risk and high liquidity, in addition to its aim of returns exceeding those of MM funds. At the review date, the weighted average credit quality of the investment portfolio was 16.5, dominated by the five major banks (90%) and the domestic sovereign (5%). We have made no negative adjustment for concentrations to the banks, as it is common place in the South African market. Furthermore, diversification across the banks is fairly good. The 12-month average maturity of 885days is a rating restraint, but duration has been managed down to 33 days so the combined impact is a slight negative for the rating. We consider the management and governance of the fund to be a neutral (best possible score) rating factor. Liquidity is a neutral rating factor, underpinned by the liquid nature of the investment portfolio, and the closely managed client investment profiles, which aid awareness of upcoming liquidity needs.

Nedgroup Investments Corporate Money Market Fund: AA+(ZA)(f) / Stable

Nedgroup Investments Corporate Money Market Fund “NEDCMF” has a fixed income mandate which aims to deliver total returns exceeding those offered by call deposits. The fund’s mandate is more strict on credit quality than those of traditional money market funds, with its investable universe limited to South Africa’s big four domestic banks, any other domestic bank rated A+(ZA) or better, local branches of foreign banks with a rating of AA(ZA) or better and non-equity securities issued or guaranteed by the South African government or the Reserve Bank. At the review date, the weighted average credit quality of the investment portfolio was 16.75, dominated by the four major banks (75%) and the domestic sovereign (18%), but also with the branches of foreign owned banks (7%). We have made no negative adjustment for concentrations to the banks, as its common place in the South African market. Furthermore, diversification across the banks is fairly good. The 12-month average weighted average maturity and duration are 123days and 33days respectively, and therefore provide some uplift to the rating. We consider the management and governance of the fund to be a neutral (best possible score) rating factor. Liquidity is currently a neutral rating factor, balancing moderately high investor concentrations and the liquid nature of the investment portfolio.

Nedgroup Investments Money Market Fund: AA+(ZA)(f) / Stable

Nedgroup Investments Money Market Fund “NEDMMF” has a fixed income mandate which aims to deliver total returns exceeding those offered by call deposits. The fund’s mandate prioritises capital preservation, low risk and high liquidity, in addition to its aim of returns exceeding those of call deposits, attracting retail, corporate and institutional investors. At the review date, the weighted average credit quality was 16.75, with the investment portfolio dominated by the four major banks (c70%), but with some diversification into sovereign (c17.5%), securitisation (5%), corporate and foreign bank branches (5%). As a result, diversification is slightly better than other rated MMF. The 12-month average weighted average maturity and duration are 124days and 41days respectively, and therefore provide some uplift to the rating. We consider the management and governance of the fund to be a neutral (best possible score) rating factor. Liquidity is appropriately managed for the behavioural and expected redemption of the fund’s investors.

Nedgroup Investments Prime Money Market Fund: AAA(ZA)(f) / Stable

Nedgroup Investments Prime Money Market Fund “NEDPMF” has a fixed income mandate which aims to deliver total returns exceeding those offered by call deposits. The fund’s mandate is stricter on credit quality than those of traditional money market funds, with its investable universe limited to Rand issued instruments issued by local branches of international banks and corporates operating in South Africa, with an international scale rating of A- or higher. The A- international scale rating minimum requirement results in the fund holding only instruments from AAA(ZA) (South African national scale rating) issuers. As a result, at the review date the weighted average credit quality of the fund was the second highest in the rated peer group at 19.25. The 12-month average weighted average maturity and duration are 98days and 71days respectively, and therefore provide some uplift to the rating. We consider the management and governance of the fund to be a neutral (best possible score) rating factor. Liquidity is considered neutral for the rating, although the fund has very high investor concentrations, this largely as a result of the fund still having close to 50% of the fund still being held by Nedgroup Investments (“NI”) and the generally sticky nature of investments from insurers (majority of the non NI investments). Further, the fund has access to pools of liquidity should it be necessary and manages redemption dates closely.

Ninety One Corporate Money Market Fund: AA+(ZA)(f) / Stable

Ninety One Corporate Money Market Fund’s (“CORPMM”, “the fund”) conservative fixed income mandate aims to achieve returns in excess of call rates. The mandate seeks to maximise interest income, whilst preserving capital and offering high liquidity, attracting primarily corporate and institutional investors. At the review date, the weighted average credit quality of the investment portfolio was 16, dominated by the five major banks (99%). We have made no negative adjustment for concentrations to the banks, as it is common place in the South African market. Furthermore, diversification across the banks is fairly good. The 12-month average weighted average maturity and duration are 140days and 65days respectively, and therefore provide some uplift to the rating. We consider the management and governance of the fund to be a neutral (best possible score) rating factor. Liquidity is a neutral rating factor, balancing high investor concentrations with inherently liquid instruments.

Ninety One Money Market Fund: AA+(ZA)(f) / Stable

The conservative fixed income mandate of Ninety One Money Market Fund (“the fund”, “INMON”) seeks to maximise interest income, while maintaining a high degree of liquidity and capital preservation, attracting primarily corporate, institutional, and retail investors. At the review date, the weighted average credit quality of the investment portfolio was 16.5, dominated by the five major banks (85%) and the branches of foreign owned banks (10%). We have made no negative adjustment for concentrations to the banks, as it is common place in the South African market. Furthermore, diversification across the banks is fairly good. The 12-month average weighted average maturity and duration are 122days and 56days respectively, and therefore provide some uplift to the rating. We consider the management and governance of the fund to be a neutral (best possible score) rating factor. Liquidity is a neutral rating factor. Although investor concentrations are moderately high for a MMF, the investments are inherently liquid.

Ninety-One STeFI Plus Fund: AA(ZA)(f) / Stable

Ninety One STeFI Plus Fund “INCASH” aims to deliver yields exceeding those typical of money market (“MM”) funds. The mandate prioritises capital preservation, low risk and high liquidity, attracting primarily institutional investors. The internal investment guidelines are focused on MM instruments issued by top tier domestic banks and the government of South Africa. At the review date, the weighted average credit quality of the investment portfolio was 16.25, dominated by the five major banks (85%) and a related money market fund (15%). We have made no negative adjustment for concentrations to the banks, as it is common place in the South African market. Furthermore, diversification across the banks is fairly good. The 12-month average weighted average maturity is a long 750days but the fund manages interest rate risk down to 70days, making the combined assessment slightly negative. We consider the management and governance of the fund to be a neutral (best possible score) rating factor. Liquidity is a neutral rating factor. The investor concentrations are moderately high in comparison to rated peers, however the investments are inherently liquid.

Momentum Money Market Fund: AA+(ZA)(f) / Stable

The Momentum Money Market Fund (“the fund”) has a fixed income mandate and strives to deliver total returns exceeding those offered by call deposits. The mandate prioritises capital preservation, low risk and high liquidity, attracting retail, corporate and institutional investors. At the review date, the weighted average credit quality of the investment portfolio was 16.5. The fund is well diversified versus other rated funds split between the domestic banks (c70%), Securitisation (5%), corporates (7%), SOEs (2%) and the South African government (17%). The 12-month average weighted average maturity and duration are 116days and 72days respectively and therefore uplifts the rating on the fund. We consider the management and governance of the fund to be a neutral (best possible score) rating factor. Liquidity is currently a neutral rating factor, although there are some concentrations to related party funds, due to the liquid nature of the investment portfolio.

Old Mutual Institutional Short-Term Fund: AA+(ZA)(f) / Stable

The fund aims to deliver regular income in excess of returns from money market yields and corporate bank deposits, while prioritising capital preservation and maintaining a high level of liquidity. The portfolio aims to outperform money market yields. At the review date, the weighted average credit quality of the investment portfolio was 17 dominated by the five major banks (65%), the domestic sovereign (30%), but also with the SOEs (5%). As a result, the portfolio is relatively well diversified versus some rated peers. The 12-month average weighted average maturity and duration are 375days and 81days respectively, and therefore provide some uplift to the rating. We consider the management and governance of the fund to be a neutral (best possible score) rating factor. Liquidity is a neutral rating factor. The fund is relatively new, so investor concentrations are high but the investments are inherently liquid.

Prescient Corporate Money Market Fund: AA+(ZA)(f) / Stable

The Prescient Corporate Money Market Fund (“PCMMF”,” the fund”) was launched on the 26th of November 2019 following its approval by the Financial Sector Conduct Authority (“FSCA”). PCMMF aims to provide regular stable income for investors while preserving capital. The fund invests in short term and money market instruments issued by the four largest banks in South Africa, thus providing daily liquidity to investors. At the review date, the weighted average credit quality of the investment portfolio was 16.5, dominated by the four major banks (85%) and the sovereign (15%). Furthermore, diversification across the banks is fairly good. The 12-month average weighted average maturity and duration are 109days and 57days respectively, and provide a +1 uplift to rating. We consider the management and governance of the fund to be a neutral (best possible score) rating factor. Liquidity is a neutral rating factor. Investor concentrations are currently very high due to the limited ageing of the fund, but are offset by the liquid nature of the assets.

Sanlam Alternative Income Fund: AA(ZA)(f) / Stable

We have upgraded the rating on Sanlam Alternative Income Fund (“SAIF” or “the fund”), to reflect the average credit quality of the underlying portfolio. SAIF’s objective is to offer a liquid, mainly dividend-yielding investment that will track the South African short-term interest rate cycle. Distributions to investors aim to exceed the average after tax yield normally received from money market funds. The fund largely invests in redeemable cumulative variable interest rate preference shares issued by banks and other financial services companies, or their preference share issuing subsidiaries, with the balance of the portfolio held in money market funds. Where required, credit-enhancing guarantees or put options are in place resulting in a senior unsecured ranking. At the review date, the weighted average credit quality was 16.25, with the investment portfolio dominated by exposures to banks (62.7%), financial services groups (25.8%) and money market funds (11.5%). The fund’s weighted average maturity is calculated taking into account liquidity features and notice periods. The 12-month average weighted average maturity is relatively long at c.475 days, however the duration is very low due to the fund largely investing in variable-rate instruments, therefore providing some uplift to the rating. We do not make any adjustment for dividend risk as a result of the portfolio’s dividends being cumulative and tracking the short-term interest rate cycle. We consider the management and governance of the fund to be a neutral (best possible score) rating factor. Liquidity is appropriately managed for the behavioural and expected redemption of the fund’s investors.

Sanlam Investment Management Enhanced Yield Fund: AA-(ZA)(f) / Stable

Sanlam Investment Management Enhanced Yield Fund aims to enhance yield by investing in a blend of floating rate note and credit instruments in a range of maturities. The fund is mandated to invest in unlisted financial instruments (derivatives) for efficient portfolio management. This portfolio may also invest in participatory interests of underlying unit trust portfolios. At the review date, the weighted average credit quality was 16.5. The fund is comprised of a diverse portfolio of investments in comparison to domestic peers, however concentrations to the large domestic financial institutions (c72.5%) still exist. Other investments include the domestic sovereign (14%), corporates (7%), foreign banks (3%), SOEs (1%) and securitisations (1%). The 12-month average weighted average maturity and duration is a relatively long versus rated peers at 924days and 340days respectively, as the funds searches for additional yield. We consider the management and governance of the fund to be neutral (best possible score) rating factor. Liquidity is currently a neutral rating factor, balancing moderately high investor concentrations and the liquid nature of the investment portfolio.

Sasfin BCI Optimal Income Fund: AAA(ZA)(f) / Stable

We have upgraded the rating on Sasfin BCI Optimal Income Fund’s (“SBOIF”), to reflect the average credit quality of the underlying portfolio. The mandate aims to deliver an average after-tax yield in excess of money market portfolio yields, while preserving the capital invested. The fund seeks to attract investment from institutional and high net worth individuals. SBOIF operate slightly differently to rated peers. In essence, the funds give its investors access to global credit, without currency risk, via an equity-like investment into a Mauritius listed special purpose vehicle. Due to the nature of the exposures (largely global financial institutions and the domestic sovereign), at the review date the weighted average credit quality was the highest amongst all rated funds, with a score of 20.5. We have made no adjustment for FI concentration risk as this is common amongst SA funds. The 12-month average long weighted average maturity (>1,200days) and duration (c35days) act as a moderate restraint to the rating. We consider the management and governance of the fund to be a neutral (best possible score) rating factor. Liquidity is currently a neutral rating factor. Investor concentrations are relatively low and the manager can liquidate 20% of the funds in 24hours.

Southchester RF Limited: AA(ZA)(f) / Stable

We have upgraded the rating on Southchester RF Limited’s (“Southchester RF”), to reflect the average credit quality of the underlying portfolio. Southchester RF is a public limited liability company that issues senior secured commercial paper via an insolvency-remote special purpose vehicle to investors, primarily institutional, and invests into a portfolio of high quality, liquid and rated fixed income instruments. The entity is regulated by the South African Reserve Bank in terms of the Banks Act, which is different to the regulatory oversight of other traditional funds, which are regulated by the FSCA under the Collective Investment Schemes Control Act. Southchester RF’s controlling shareholder is Southchester Holdings Trust, while Southchester Investment Managers is the portfolio manager. Southchester Investment Managers is a niche fixed income asset manager specializing in creating and managing short term liquid portfolios and alternative fixed income asset classes. At the review date, the weighted average credit quality of the investment portfolio was 16.25, dominated by direct and indirect exposures to the five major banks and the domestic sovereign. We have made no negative adjustment for concentrations to the banks, as it is common place in the South African market. The 12-month average weighted average maturity is around 200 days but duration is brought down significantly to around 35 days, as such the assessment is a slight positive to the rating. Conversely, the management and governance score is slightly negative, reflecting previous changes in structure over the past few years. Liquidity is a neutral factor. Whilst there is some concentration to a group of counterparties, the instruments are liquid and the fund is behaviourally stable.

STANLIB Corporate Money Market Fund; AA+(ZA)(f) / Stable

The fixed income mandate of STANLIB CMMF offers investors a means to participate in well-diversified portfolio of money market instruments, with a priority on capital preservation, low risk and high liquidity. The mandate targets corporate and institutional investors. The investment portfolio consists of only senior unsecured instruments and is split between the five large banks (85%), foreign bank branches (10%) and the sovereign. As a result, at the review date the weighted average credit quality was a relatively high 16.75. Furthermore, the short 12-month average weighted average maturity (105days) and duration (15days) also provide some uplift to the rating. We consider the management and governance of the fund to be neutral (best possible score) rating factor. Liquidity is currently a neutral rating factor, as the relatively high investor concentrations are managed well by a highly liquid investment portfolio and behaviourally stable redemption dates.

STANLIB Extra Income Fund: AA-(ZA)(f) / Positive

The STANLIB Extra Income Fund (“STANLIB EIF”) fund aims to provide investors an opportunity to earn higher income than money market investments, while enjoying the stability associated with money market funds. Investments include a flexible mix of money market instruments, bonds, fixed deposits, listed debentures and other high yielding securities, subject to restrictions imposed by CISCA and Regulation 28 of the Pension Funds Act. The investment portfolio is well diversified in comparison to some of the GCR rated fund universe. The top five banks represent around 65% of the total portfolio, with a good mix between securitisations, SOEs, corporates and other banks (besides the top 5 local banks). However, at the review date the weighted average credit quality was relatively lower than peers, at 15.75. This could improve in the next six months if some of the exposures are successfully restructured out of default. The 12-month average weighted average maturity and duration is a neutral assessment, with the latter termed out to around 675days to pick up yield but the former brought in to around 40days to minimise interest rate risk. We consider the management and governance of the fund to be a neutral (best possible score) rating factor. Liquidity is currently a neutral rating factor. The fund offers T+3 returns, has moderate concentrations and a fairly liquid investment portfolio.

We could raise the rating on the fund in the next 6-12months if the weighted average credit quality improves. All other factors are considered stable.

Analytical Contacts

Primary analyst

Thandolwenkosi Mkwananzi

Financial Institutions Analyst

Johannesburg, ZA

ThandolwenkosiM@GCRratings.com

+27 11 784 1771

     

Committee chair

Matthew Pirnie

Group Head of Ratings

Johannesburg, ZA

MatthewP@GCRratings.com

+27 11 784 1771

Related criteria and research

Criteria for the GCR Ratings Framework, May 2019

Criteria for Fund Ratings, July 2020

GCR Rating Scales, Symbols and Definitions, May 2019

Ratings History

Absa Core Income Fund

Rating class

Review

Rating scale

Rating class

Outlook

Date

Fund rating

Initial

National

AA(ZA)(f)

Stable

December 2017

Fund rating

Last

National

AA(ZA)(f)

Stable

November 2019

Absa Money Market Fund

Rating class

Review

Rating scale

Rating class

Outlook

Date

Fund rating

Initial

National

AA+(ZA)(f)

Stable

November 2016

Fund rating

Last

National

AA+(ZA)(f)

Stable

November 2019

Ashburton Money Market Fund

Rating class

Review

Rating scale

Rating class

Outlook

Date

Fund rating

Initial

National

AA(ZA)(f)

Stable

December 2017

Fund rating

Last

National

AA(ZA)(f)

Stable

December 2019

Ashburton Stable Income Fund

Rating class

Review

Rating scale

Rating class

Outlook

Date

Fund rating

Initial

National

AA-(ZA)(f)

Stable

February 2019

Fund rating

Last

National

AA-(ZA)(f)

Stable

December 2019

BCI Money Market Fund

Rating class

Review

Rating scale

Rating class

Outlook

Date

Fund rating

Initial

National

AA(ZA)(f)

Stable

April 2018

Fund rating

Last

National

AA(ZA)(f)

Stable

April 2020

Nedgroup Investments Core Income Fund

Rating class

Review

Rating scale

Rating class

Outlook

Date

Fund rating

Initial

National

AA(ZA)(f)

Stable

March 2016

Fund rating

Last

National

AA(ZA)(f)

Stable

March 2020

Nedgroup Investments Corporate Money Market Fund

Rating class

Review

Rating scale

Rating class

Outlook

Date

Fund rating

Initial

National

AA+(ZA)(f)

Stable

March 2016

Fund rating

Last

National

AA+(ZA)(f)

Stable

March 2020

Nedgroup Investments Money Market Fund

Rating class

Review

Rating scale

Rating class

Outlook

Date

Fund rating

Initial

National

AA+(ZA)(f)

Stable

March 2016

Fund rating

Last

National

AA+(ZA)(f)

Stable

March 2020

Nedgroup Investments Prime Money Market Fund

Rating class

Review

Rating scale

Rating class

Outlook

Date

Fund rating

Initial

National

AAA(ZA)(f)

Stable

June 2018

Fund rating

Last

National

AAA(ZA)(f)

Negative

March 2020

Ninety One Corporate Money Market Fund

Rating class

Review

Rating scale

Rating class

Outlook

Date

Fund rating

Initial rating

National

AA+(ZA)(f)

Stable

March 2016

Fund rating

Last rating

National

AA+(ZA)(f)

Stable

March 2020

Ninety One Money Market Fund

Rating class

Review

Rating scale

Rating class

Outlook

Date

Fund rating

Initial rating

National

AA+(ZA)(f)

Stable

March 2016

Fund rating

Last rating

National

AA+(ZA)(f)

Stable

March 2020

Ninety One Stefi Plus Fund

Rating class

Review

Rating scale

Rating class

Outlook

Date

Fund rating

Initial rating

National

AA(ZA)(f)

Stable

March 2016

Fund rating

Last rating

National

AA(ZA)(f)

Stable

March 2020

Momentum Money Market Fund

Rating class

Review

Rating scale

Rating class

Outlook

Date

Fund rating

Initial rating

National

AA+(ZA)(f)

Stable

February 2020

Fund rating

Last rating

National

AA+(ZA)(f)

Stable

February 2020

Old Mutual Institutional Short Term Fund

Rating class

Review

Rating scale

Rating class

Outlook

Date

Fund rating

Initial rating

National

AA+(ZA)(f)

Stable

February 2019

Fund rating

Last rating

National

AA+(ZA)(f)

Stable

February 2020

Prescient Corporate Money Market Fund

Rating class

Review

Rating scale

Rating class

Outlook

Date

Fund rating

Initial rating

National

AA(ZA)(f)

Stable

December 2019

Fund rating

Last rating

National

AA(ZA)(f)

Stable

December 2019

Sanlam Alternative Income Fund

Rating class

Review

Rating scale

Rating class

Outlook

Date

Fund rating

Initial rating

National

AA-(ZA)(f)

Stable

October 2016

Fund rating

Last rating

National

AA-(ZA)(f)

Stable

December 2019

Sanlam Investment Management Enhanced Yield Fund

Rating class

Review

Rating scale

Rating class

Outlook

Date

Fund rating

Initial rating

National

AA-(ZA)(f)

Stable

October 2016

Fund rating

Last rating

National

AA-(ZA)(f)

Stable

December 2019

Sasfin BCI Optimal Income Fund

Rating class

Review

Rating scale

Rating class

Outlook

Date

Fund rating

Initial rating

National

AA-(ZA)(f)

Stable

April 2017

Fund rating

Last rating

National

AA-(ZA)(f)

Stable

May 2019

Southchester RF Limited

Rating class

Review

Rating scale

Rating class

Outlook

Date

Fund rating

Initial

National

AA(ZA)(f)

Stable

September 2017

Fund rating

Last

National

AA-(ZA)(f)

Stable

June 2020

STANLIB Corporate Money Market Fund

Rating class

Review

Rating scale

Rating class

Outlook

Date

Fund rating

Initial

National

AA+(ZA)(f)

Stable

April 2016

Fund rating

Last

National

AA+(ZA)(f)

Stable

April 2020

STANLIB Extra Income Fund

Rating class

Review

Rating scale

Rating class

Outlook

Date

Fund rating

Initial

National

AA-(ZA)(f)

Stable

April 2016

Fund rating

Last

National

AA-(ZA)(f)

Stable

April 2020

Glossary

Asset

A resource with economic value that a company owns or controls with the expectation that it will provide future benefit.

Asset Quality

Refers primarily to the credit quality of a bank’s earning assets, the bulk of which comprises its loan portfolio, but will also include its investment portfolio as well as off balance sheet items. Quality in this context means the degree to which the loans that the bank has extended are performing (ie, being paid back in accordance with their terms) and the likelihood that they will continue to perform.

Capital

The sum of money that is invested to generate proceeds.

Cash

Funds that can be readily spent or used to meet current obligations.

Credit Rating

An opinion regarding the creditworthiness of an entity, a security or financial instrument, or an issuer of securities or financial instruments, using an established and defined ranking system of rating categories.

Liquid Assets

Assets, generally of a short term, that can be converted into cash.

Liquidity

The speed at which assets can be converted to cash. It can also refer to the ability of a company to service its debt obligations due to the presence of liquid assets such as cash and its equivalents. Market liquidity refers to the ease with which a security can be bought or sold quickly and in large volumes without substantially affecting the market price. 

Liquidity Risk

The risk that a company may not be able to meet its financial obligations or other operational cash requirements due to an inability to timeously realise cash from its assets. Regarding securities, the risk that a financial instrument cannot be traded at its market price due to the size, structure or efficiency of the market.

Long-Term

Not current; ordinarily more than one year.

Long-Term Rating

Reflects an issuer’s ability to meet its financial obligations over the following three to five year period, including interest payments and debt redemptions. This encompasses an evaluation of the organisation’s current financial position, as well as how the position may change in the future with regard to meeting longer term financial obligations.

Maturity

The length of time between the issue of a bond or other security and the date on which it becomes payable in full.

Net Asset Value

The value of an entity’s assets less its liabilities. It is a reflection of the company’s underlying value and is usually quoted on a per share basis.

Portfolio

A collection of investments held by an individual investor or financial institution. They may include stocks, bonds, futures contracts, options, real estate investments or any item that the holder believes will retain its value.

Principal

The total amount borrowed or lent, e.g. the face value of a bond, excluding interest.

Risk

The chance of future uncertainty (i.e. deviation from expected earnings or an expected outcome) that will have an impact on objectives.

Short-Term

Current; ordinarily less than one year.

Short-Term Rating

An opinion of an issuer’s ability to meet all financial obligations over the upcoming 12 month period, including interest payments and debt redemptions.

Tenor

The time from the value date until the expiry date of a financial instrument.

Yield

Percentage return on an investment or security, usually calculated at an annual rate.

SALIENT POINTS OF ACCORDED RATING

GCR affirms that a.) no part of the ratings were influenced by any other business activities of the credit rating agency; b.) the ratings were based solely on the merits of the rated entity, security or financial instrument being rated and c.) such ratings were an independent evaluation of the risks and merits of the rated entity, security or financial instrument.

The rated entities participated in the rating process via telephonic management meetings and other written and telephonic correspondence. Furthermore, the quality of information received was considered adequate and has been independently verified where possible.

The fund ratings have been disclosed to the rated entities.

The information received from the rated entities and other reliable third parties to accord the fund rating included:

  • A breakdown of the fund investment portfolio, including information on the instruments, their terms, conditions and credit quality;
  • A breakdown of the fund investor portfolio, including fund flows and withdrawal terms;
  • Detail on historical fund returns, fee structures, and expense ratios (where available);
  • Details regarding the fund management, investment management and administration activities of the fund;
  • Industry comparative data and regulatory framework.

The ratings above were solicited by, or on behalf of, the rated entities, and therefore, GCR has been compensated for the provision of the ratings.

 

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CREDIT RATINGS ISSUED AND RESEARCH PUBLICATIONS PUBLISHED BY GCR, ARE GCR’S OPINIONS, AS AT THE DATE OF ISSUE OR PUBLICATION THEREOF, OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES. GCR DEFINES CREDIT RISK AS THE RISK THAT AN ENTITY MAY NOT MEET ITS CONTRACTUAL AND/OR FINANCIAL OBLIGATIONS AS THEY BECOME DUE. CREDIT RATINGS DO NOT ADDRESS ANY OTHER RISK, INCLUDING BUT NOT LIMITED TO: FRAUD, MARKET LIQUIDITY RISK, MARKET VALUE RISK, OR PRICE VOLATILITY. CREDIT RATINGS AND GCR’S OPINIONS INCLUDED IN GCR’S PUBLICATIONS ARE NOT STATEMENTS OF CURRENT OR HISTORICAL FACT. CREDIT RATINGS AND GCR’S PUBLICATIONS DO NOT CONSTITUTE OR PROVIDE INVESTMENT OR FINANCIAL ADVICE, AND CREDIT RATINGS AND GCR’S PUBLICATIONS ARE NOT AND DO NOT PROVIDE RECOMMENDATIONS TO PURCHASE, SELL OR HOLD PARTICULAR SECURITIES. NEITHER GCR’S CREDIT RATINGS, NOR ITS PUBLICATIONS, COMMENT ON THE SUITABILITY OF AN INVESTMENT FOR ANY PARTICULAR INVESTOR. GCR ISSUES ITS CREDIT RATINGS AND PUBLISHES GCR’S PUBLICATIONS WITH THE EXPECTATION AND UNDERSTANDING THAT EACH INVESTOR WILL MAKE ITS OWN STUDY AND EVALUATION OF EACH SECURITY THAT IS UNDER CONSIDERATION FOR PURCHASE, HOLDING OR SALE.

Copyright © 2021 GCR INFORMATION PUBLISHED BY GCR MAY NOT BE COPIED OR OTHERWISE REPRODUCED OR DISCLOSED, IN WHOLE OR IN PART, IN ANY FORM OR MANNER OR BY ANY MEANS WHATSOEVER, BY ANY PERSON WITHOUT GCR’S PRIOR WRITTEN CONSENT. Credit ratings are solicited by, or on behalf of, the issuer of the instrument in respect of which the rating is issued, and GCR is compensated for the provision of these ratings. Information sources used to prepare the ratings are set out in each credit rating report and/or rating notification and include the following: parties involved in the ratings and public information. All information used to prepare the ratings is obtained by GCR from sources reasonably believed by it to be accurate and reliable. Although GCR will at all times use its best efforts and practices to ensure that the information it relies on is accurate at the time, GCR does not provide any warranty in respect of, nor is it otherwise responsible for, the accurateness of such information.GCR adopts all reasonable measures to ensure that the information it uses in assigning a credit rating is of sufficient quality and that such information is obtained from sources that GCR, acting reasonably, considers to be reliable, including, when appropriate, independent third-party sources. However, GCR cannot in every instance independently verify or validate information received in the rating process. Under no circumstances shall GCR have any liability to any person or entity for (a) any loss or damage suffered by such person or entity caused by, resulting from, or relating to, any error made by GCR, whether negligently (including gross negligence) or otherwise, or other circumstance or contingency outside the control of GCR or any of its directors, officers, employees or agents in connection with the procurement, collection, compilation, analysis, interpretation, communication, publication or delivery of any such information, or (b) any direct, indirect, special, consequential, compensatory or incidental damages whatsoever (including without limitation, lost profits) suffered by such person or entity, as a result of the use of or inability to use any such information. The ratings, financial reporting analysis, projections, and other observations, if any, constituting part of the information contained in each credit rating report and/or rating notification are, and must be construed solely as, statements of opinion and not statements of fact or recommendations to purchase, sell or hold any securities. Each user of the information contained in each credit rating report and/or rating notification must make its own study and evaluation of each security it may consider purchasing, holding or selling. NO WARRANTY, EXPRESS OR IMPLIED, AS TO THE ACCURACY, TIMELINESS, COMPLETENESS, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF ANY SUCH RATING OR OTHER OPINION OR INFORMATION IS GIVEN OR MADE BY GCR IN ANY FORM OR MANNER WHATSOEVER.