Northstar BCI Income Fund

This low-risk fund is ideal for investors who require regular and stable income that targets inflation beating returns over the long-term, while actively managing risk of capital loss in the short-term. The recommended investment time horizon is 1-3 years. Managed in accordance with Regulation 28.

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Fund Performance

Northstar BCI Income Fund

Who should invest

This low risk fund is ideal for investors seeking consistent above cash and inflation returns whilst generating a healthy income from a diverse portfolio of actively managed income assets. This fund is managed in accordance with Regulation 28, making it suitable for retirement capital. An investment time horizon of at least 3 years is recommended.

Returns reflected below the chart are annualised. Source: Bloomberg, MorningStar and Northstar Asset Management.

Horizon:

  • 3 Years
  • 5 Years
  • 7 Years
  • 10 Years
  • SINCE INCEPTION
FUND RETURN

Benchmark Return

Outperformance

Benchmark Return

Outperformance

  • Provides investors with regular and stable income.
  • Targets inflation beating returns over the long-term.
  • High liquidity profile and well diversified across asset classes.
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Invest Now

Invest with Northstar directly

We can assist you with making direct investments but without financial advice. Direct investments via Northstar are subject to certain minimums.  Simply get in touch with our client service team by emailing admin@northstar.co.za

Speak to your financial advisor

Northstar’s funds are available via all the major local and offshore LISPS (linked Investment Services Providers). Please contact us for further information on how to invest via a LISP should that be your preference.

Requirements For This Fund

  • R 10 000
  • R 500
    • Certified Copy of both sides of ID Document with 3 specimen signatures.
    • Proof of Address (not older than 3 months) e.g. utility bill, rates, Telkom.
    • Proof of Banking details (not older than 3 months).
    • SARS document containing name and tax number.
  • Our unit trust range can be accessed via a number of platform providers. Please contact us for further information.

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Further Reading

Commentary for the quarter ended 31 March 2024

Q1 2024 Performance review

The Northstar Income fund underperformed the STeFI x110% benchmark by 0.95% over the last 12 months, with a net return of 8.00% vs. 8.95%, however has enjoyed strong outperformance over the last 6 months with the fund delivering 5.94% vs. 4.47%.

The 35% weighting to fixed bonds contributed 2.7%, with strong returns from the R2037, R2030, R2035, R2032 and the ABS16. The 34% average weighting to inflation-linked bonds was the next best contributor of 2.4%, with the most substantial gains from holdings in I2025, NI29, FRBI25, SBSI14, and I2029. In addition, floating rate notes and gold made meaningful contributions of 1.6% and 0.85%, respectively. Local cash, US cash, listed property and holdings in the Northstar Global Income fund made up the difference in contribution.

Market Outlook and Portfolio Positioning

In the first quarter of 2024, South Africa faced several macroeconomic challenges. The economy was projected to grow by just 1.2%, influenced by persisting issues such as high interest rates and ongoing disruptions in energy supply. These issues were compounded by infrastructural damage due to adverse weather, leading to a conservative outlook on economic recovery. Inflation, however, was expected to ease within the target range of 3-6%​.

Consumer spending showed signs of strain as household expenditure weakened, influenced by falling real salaries and high inflation, particularly from rising fuel and food costs. These economic conditions were reflected in subdued business activity and consumer sentiment, with expected ongoing issues in electricity supply (load shedding) and logistics, particularly in port congestion.

In the United States, the economic scenario was moderately better. The growth outlook for 2024 was forecasted at 1.5% by the OECD, reflecting a slowdown due to the effects of previous monetary tightening but with expectations of monetary policy easing within the year. This easing was anticipated despite a global environment of only mild economic slowdowns projected for 2024, thus avoiding a recession​.

In anticipation of easing monetary policy globally, cash is being gradually reduced in favour of local fixed bonds and US treasuries, with a preference for short-to-medium points on the curves.

The Northstar Income Fund remains well positioned with a marginally higher-than-average duration, looking to benefit from a falling interest rate cycle. However, we remain vigilant to South Africa’s prevailing risks and hold attractively valued global assets, including short-dated US Treasury bonds and gold.

Quarterly Fund Video as at 31 March 2024

 

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About This Fund

Latest Allocation

  • Fixed Income
  • Cash
  • Equity
  • Alternatives
Management Date
22 July 2014
Sector
South African - Multi Asset - Income
Fund Size
R 714 million
Minimum Investment
Lump sum: R 10 000
Monthly: R 500
Latest Distribution
1.42 cpu (30/06/2023)
INVESTMENT MANAGEMENT FEE
0.85% p.a. (Excl. VAT)
Risk Profile
Low
Allocation
Time Horizon
1-3 Years
Regulation 28
Yes
Benchmark
110% STeFI Call Deposit
Fund Classification
South African - Multi Asset - Income

* This is the date Northstar began the management of the fund