The Marriott Core Income Fund is an income fund with an active asset allocation, allowing us to take advantage of opportunities as they arise, and provides:
The fund has a proven track record and is ideal for conservative investors with a 24-month time horizon.
Despite interest rates falling by 2.75% since the beginning of the year, the portfolio's income yield remains attractive at a yield of approximately 7.0%. The chart below highlights the published yields of the Marriott Core Income Fund and the Marriott Money Market Fund over the last 10 years.
The Core Income Fund has consistently delivered a higher level of income than the average of both the Interest Bearing – Money Market and the Multi-Asset Income Sectors, as indicated below:
|Core Income Fund – Income Produced on R1,000,000 investment (as at 30 June 2020)|
|Fund/Sector Average||1 year||3 years||5 years||10 years||15 years|
|Core Income Fund Class A||R76 036||R245 919||R400 609||R760 660||R1 209 240|
|Core Income Fund Class C (LISPs)*||R78 881||R254 664||R414 584||n/a*||n/a*|
|SA Multi-Asset – Income Sector||R64 384||R 204 046||R338 985||R625 243||R1 045 613|
|SA Interest Bearing – Money Market Sector||R65 562||R 202 252||R330 188||R 608 221||R1 032 323|
*Core Income Fund C Class launched in July 2013. Source: Profile Data
The Fund has a good track record of generating inflation-beating returns with high levels of capital stability. The economic uncertainty stemming from the Coronavirus has resulted in extreme levels of market volatility across all asset classes which has been unsettling for investors. Although not immune to the sell-off, the Core Income Fund has fared well and has been a good place to be invested.
|Core Income Fund – Annualised Total Return (as at 30 June 2020)|
|Fund/CPI||1 year||3 years||5 years||10 years||15 years|
|Core Income Fund Class A||10.05%||9.40%||8.63%||7.54%||8.10%|
|Core Income Fund Class C (LISPs)*||10.37%||9.71%||8.94%||n/a*||n/a*|
|SA Multi-Asset – Income Sector||5.14%||6.89%||7.09%||7.05%||7.09%|
|Sector Ranking (Class A)||5th out of 114||7th out of 91||8th out of 74||11th out of 35||5th out of 14|
*Core Income Fund C Class launched in July 2013. Source: Profile Data
For periods longer than 12 months annualised performance figures are used. An annualised performance figure represents the compounded average return in percentage terms earned by the fund over the given period of time.
Applying our income focused investment style, the Core Income Fund is uniquely managed to produce a high and reliable income stream through the interest rate cycles. By taking advantage of recent buying opportunities, particularly 7-year government bonds, the Core Income Fund remains well-positioned, despite recent cuts in the South African repo rate. Whilst this has fallen by a total of 2.75% since the beginning of the year, the income produced by the portfolio will remain substantially higher than money market rates due to investing in longer term instruments with higher income yields. The graph below highlights how the fund has taken advantage of higher yields on offer in March and April by buying approximately 36% Government Bonds at an average yield of approximately 10%.
It should be noted that bond market volatility is likely to persist for a while longer before conditions settle down. Since the Core Income Fund portfolio has liquidity on hand, we intend to continue taking advantage of the opportunity to buy into suitable investments at attractive income yields. This will enable the Fund to continue delivering a high, reliable income and decent returns.
Looking ahead, we are confident that the fund will continue weathering current economic conditions well. From a long-term perspective, market volatility is providing investment opportunities which we are steadily taking advantage of. This will enable the fund to continue delivering a high and reliable income stream, and inflation beating returns for many years to come.
|Fund/CPI||Direct Marriott Unit Trusts||Direct Marriott Solutions||Via a LISP|
|Living Annuity||Income Solution|
|Core Income Fund||✓||n/a||n/a||✓|
|High Income Fund of Funds*||✓||✓||✓||✓|
*The Marriott High Income Fund of Funds invests into the Core Income Fund and has the same outlook.
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Please note that Marriott does not charge any performance fees across its fund range.
|Fund/CPI||Marriott Annual Management Fee (excl. VAT)|
|Core Income Fund Class A||1.00%|
|Core Income Fund Class C (LISPs)||0.75%|
Collective investment schemes are generally medium to long-term investments. The value of participatory interests or the investment may go down as well as up. Past performance is not necessarily a guide to future performance. Collective investment schemes are traded at ruling prices and can engage in borrowing and scrip lending. If required, the manager may borrow up to 10% of the market value of the portfolio to bridge insufficient liquidity. Forward pricing is used. The ruling price of the day is calculated at approximately 15h00 SA time each day. Purchase and repurchase requests must be received by the manager by 15h00 SA time each business day. Prices are published on a daily basis on the Marriott website, www.marriott.co.za. Unit trusts are calculated on a net asset value basis. Net asset value is the value of all assets in the portfolio including any income accrual and less any permissible deductions from the portfolio. Marriott does not provide any guarantees with respect to the capital or the return of the portfolio. A schedule of fees and charges and maximum commissions is available on request from Marriott. Where initial fees are applicable, these fees are deducted from the investment consideration and the balance invested in units at the net asset value. Commissions and incentives may be paid and if so, would be included in the overall costs. Different classes of units apply to the fund and are subject to different fees and charges. Declaration of income accruals are monthly. Performance figures are based on lump sum investment. Individual investor performance may differ as a result of initial fees, the actual investment date, the date of reinvestment and dividend withholding tax. Past performance is not indicative of future performance. This portfolio may be closed to new investors in order to manage it more efficiently in accordance with its mandate. The TER shows the percentage of the average Net Asset Value of the portfolio that was incurred as charges, levies and fees relating to the management of the portfolio. A higher TER ratio does not necessarily imply poor return, nor does a low TER imply a good return. The current TER cannot be regarded as an indication of future TERs. Transaction Costs are a necessary cost in administering the Financial Product and impacts Financial Product returns. It should not be considered in isolation as returns may be impacted by many other factors over time including market returns, the type of Financial Product, the investment decisions of the investment manager and the TER. Marriott Unit Trust Management Company (RF) (Pty) Ltd is a member of the Old Mutual Investment Group. Old Mutual is a member of the Association for Savings and Investment South Africa (ASISA).
Please note that where the term ‘yield/yields’ is used, these are historic yields