In September, your fund beat its benchmark for the 16th month in a row, but by a below-average amount. Strong inflows to the fund present a double-edged sword: immediately upon arrival, they reduce the fund's overall yield, due to the yield curve being positively sloped and the need to initially buy very liquid but relatively low-yielding instruments such as NCDs and short-dated government bonds; conversely they permit us to make reverse inquiries from preferred issuers.

The latest inflation data was once more benign, more news of poor governance emanated from several SOEs, the countrys fiscal situation worsened a bit more ....and bonds achieved another decent return. All in all, a bog-standard month for bonds then.

Bonds vindicate a Steady-Eddie reputation. Over the past 1, 3, 5, 10 and 20 years, the real returns of the All Bond Index have been 6.7%, 3.9%, 3.1%, 3.5% and 4.9% respectively. (Inflation estimated at 4.4% y-o-y for September 2019). By way of contrast, the All Share Index easily trumps that over 20 years (9.2%) but has suffered negative real returns over the past 5 years.