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\t\t<\/span><\/p>\n <\/span><\/p>\n \n \t\t\u00a9 Thomson Reuters 2012 All rights reserved<\/p>\n","protected":false},"excerpt":{"rendered":" April 4 – Fitch Ratings has affirmed the National Fund Credit Ratings and National Fund Volatility Ratings of the following South African money market funds (MMFs) managed by Investec Asset Management (IAM): Investec Corporate Money Market Fund (ICMMF) Fund Credit Rating affirmed at ‘AA+(zaf)’; Fund Volatility Rating affirmed at ‘V1(zaf)’; Investec Money Market Fund (IMMF) […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","ngg_post_thumbnail":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[1],"tags":[830,2370,183],"class_list":{"0":"post-9650","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-south-africa","7":"tag-news","8":"tag-reuters","9":"tag-south-africa-2","10":"entry"},"jetpack_publicize_connections":[],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/posts\/9650","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/comments?post=9650"}],"version-history":[{"count":0,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/posts\/9650\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/media?parent=9650"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/categories?post=9650"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/tags?post=9650"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}April 4 - Fitch Ratings has affirmed the National Fund Credit Ratings and\nNational Fund Volatility Ratings of the following South African money market\nfunds (MMFs) managed by Investec Asset Management (IAM):\t\n\t\nInvestec Corporate Money Market Fund (ICMMF)\t\nFund Credit Rating affirmed at 'AA+(zaf)'; Fund Volatility Rating affirmed at\n'V1(zaf)';\t\n\t\nInvestec Money Market Fund (IMMF)\t\nFund Credit Rating affirmed at 'AA+(zaf)'; Fund Volatility Rating affirmed at\n'V1(zaf)';\t\n\t\nKEY RATING DRIVERS:\t\nThe affirmations of the Fund Credit Ratings are driven by the funds' high and\nstable credit quality, as reflected by the funds' weighted average rating\nfactors (WARFs) and rating distributions.\t\n\t\nThe affirmations of the Fund Volatility Ratings are driven by the funds' low\nexposure to interest rate risk and spread risk, as reflected in their short\nmaturity profiles.\t\n\t\nASSET CREDIT QUALITY:\t\nThe weighted average credit quality of these funds is high, taking into\nconsideration the short maturities of invested assets and has remained\nrelatively stable over time. The funds primarily invest in issuers rated in the\n'F1+(zaf)'\/'AA(zaf)' rating category. Approximately 60% of the ICMMF and 70% of\nIMMF were subject to a Negative Outlook as of March 2012, reflecting the\nrevision of the Outlook on South Africa's long-term foreign and local currency\nIssuer Default Ratings to Negative in January 2012 and the resulting impact on\nSouth African banks' rating outlooks.\t\n\t\nCONCENTRATION:\t\nIn Fitch's opinion, these funds incur substantial concentration risk, with the\ntop three issuer exposures consistently in excess of 50% of portfolio holdings.\nIn line with its applicable rating criteria, Fitch typically adjusts the\nWARF-implied Fund Credit Rating of funds it deems concentrated by one or more\nnotches. Without concentration risk these funds could achieve 'AAA(zaf)' Fund\nCredit Ratings.\t\n\t\nThe concentrated holdings reflect the funds' investment mandates and the\nstructural characteristics of the South African market, with a limited supply of\ntreasury bills, and the five largest banks having a combined market share of\naround 90%, according to Fitch's estimates. The IMMF may also invest in asset\nbacked commercial paper conduits. However, these conduits are generally fully\nsupported by the major South African banks and, as a result, provide limited\ndiversification.\t\n\t\nWithout a structural evolution of the South African market which results in a\nmore diverse, high quality and liquid issuance market, it is highly unlikely\nthat Fitch could rate any money market fund higher than 'AA+(zaf)' in South\nAfrica\t\n\t\nPORTFOLIO SENSITIVITY TO MARKET RISK:\t\nBoth funds have low exposure to interest rate risk and spread risk, as reflected\nby short maturity profiles, with the result that the market risk factors (i.e. a\nrisk-adjusted duration measure) for these funds are low, consistent with\n'V1(zaf)' ratings. As per regulation, the funds' weighted average maturities are\ncapped at 90 days and no investment may have a maturity of greater than 365\ndays.\t\n\t\nFUND PROFILES:\t\nBoth funds are regulated by South Africa's Financial Services Board under the\nCollective Investment Schemes Control Act of 2002 (specifically Notice 1503 of\n2005). Fitch notes that amendments to this legislation have been proposed and\nare expected to be implemented in 2012. Fitch believes that the funds are well\npositioned to comply with the proposed new regulatory framework.\t\n\t\nThe IMMF is also Regulation 28 compliant, making it an eligible investment for\nSouth African pension schemes.\t\n\t\nBoth funds invest in fixed- and floating-rate money market instruments including\nnegotiable certificates of deposit, promissory notes and fixed deposits issued\nprimarily by the major South African and foreign banks with local operations.\t\n\t\nAs of end February 2012 the IMMF had ZAR21.7bn in assets under management (AUM)\nand the ICMMF ZAR2.5bn.\t\n\t\nTHE ADVISOR:\t\nFitch considers IAM suitably qualified, competent and capable of managing these\nfunds. IAM is a part of the Investec Group (NR), which also includes Investec\nLtd ('BBB-'\/Negative\/'F3'). As of December 2011 IAM had ZAR711.6bn in AUM,\nincluding ZAR224bn in fixed income (around 30% of AUM). The funds are co-managed\nby Lisa MacLeod and Vivienne Taberer both of whom have deep experience and\ntenure with IAM. The portfolio managers are part of IAM's global fixed income\ninvestment team consisting of 37 investment professionals with average\nexperience of 14 years. Fitch views positively the rigour of IAM's credit\nanalysis and its structured investment process, notably the use of its\nproprietary money market model.\t\n\t\nRATING SENSITIVITY:\t\nFunds in the 'AA(zaf)' rating category are considered to have very high\nunderlying credit quality. The fund's assets are expected to maintain a\nweighted-average portfolio rating of 'AA(zaf)'.\t\n\t\nFunds rated 'V1(zaf)' are considered to have low sensitivity to market risk. On\na relative basis, total returns of funds rated 'V1(zaf)' are expected to exhibit\nhigh stability, performing consistently across a broad range of market\nscenarios. The Fund Volatility Rating does not address the sensitivity of a bond\nfund to extreme risks that may result from reduced liquidity in secondary\nmarkets during certain periods of time.\t\n\t\nComparisons between different national fund rating scales or between an\nindividual national and international scale are inappropriate.\t\n\t\nThe ratings assigned to the funds may be sensitive to material changes in the\ncredit quality or market risk profile of the funds. A material adverse deviation\nfrom Fitch criteria for any key rating driver could cause ratings to be\ndowngraded by Fitch. Specifically, Fitch would expect to downgrade the Fund\nCredit Ratings in the event of sustained deterioration in credit quality,\nlargely tied to its credit opinion on the South African banking industry. Given\nthe short maturity profiles of these funds the Fund Volatility Ratings are\nexpected to be stable. However, should interest rates or market volatility in\nSouth Africa structurally change then Fitch would expect to downgrade the Fund\nVolatility Ratings.\t\n\t\nRATING CRITERIA:\t\nFitch rates MMFs in South Africa under its global bond fund rating criteria.\nThis reflects the differences the agency perceives between South African MMFs\nand other Fitch-rated MMFs under its international and national MMF rating\ncriteria (see below). Specifically, the high level of concentration in these\nfunds, a structural characteristic of the South African market, is inconsistent\nwith Fitch's view of the risk profile of a MMF. The agency also notes regulatory\ndifferences between the US and European MMFs (subject to Rule 2a-7 in the US and\nthe ESMA guidelines for MMFs in Europe) and the regulatory regime in South\nAfrica, in spite of proposed changes to applicable regulation in South Africa.\t\n\t\nFor additional information about Fitch rating criteria applicable to bond funds,\nplease review the criteria referenced below, which can be found on Fitch's web\nsite at www.fitchratings.com.\t\n\t\n\t\nAdditional information is available at www.fitchratings.com.\t\n\t\nThe ratings above were solicited by, or on behalf of, the issuer, and therefore,\nFitch has been compensated for the provision of the ratings.\t\n\t\nThe sources of information used to assess this rating were the public domain and\nIAM.\t\n\t\nApplicable criteria and related research: 'Global Bond Fund Rating Criteria',\ndated 16 August 2011,\t\n'South African Money Market Funds - Analysis under Updated Criteria - Amended',\ndated 17 August 2011, 'South Africa', dated 1 February 2012, 'Money Market Fund\nReform in South Africa', dated 29 February 2012, 'Global Money Market Fund\nRating Criteria', dated 29 March 2012, 'National Scale Money Market Fund Rating\nCriteria', dated 15 March 2010 are available at www.fitchratings.com.\t\n\t\nNote to Editors: Fitch's National ratings provide a relative measure of\ncreditworthiness for rated entities in countries with relatively low\ninternational sovereign ratings and where there is demand for such ratings. The\nbest risk within a country is rated 'AAA' and other credits are rated only\nrelative to this risk. National ratings are designed for use mainly by local\ninvestors in local markets and are signified by the addition of an identifier\nfor the country concerned, such as 'AAA(zaf)' for National ratings in South\nAfrica. Specific letter grades are not therefore internationally comparable.\t\n\t\nNational Fund Volatility ratings are an opinion of the relative sensitivity of\nthe total return, including market price, on a fund's shares to a broad array of\nassumed interest rates, rate of mortgage prepayment, liquidity of the portfolio,\nspreads, currency exchange rates, and other market conditions. Additional\ninformation is available at www.fitchratings.com.\t\n\t\nApplicable Criteria and Related Research:\t\nGlobal Bond Fund Rating Criteria\t\nSouth African Money Market Funds - Analysis under Updated Criteria - Amended\t\nMoney Market Fund Reform in South Africa\t\nGlobal Money Market Fund Rating Criteria\t\nNational Scale Money Market Fund Rating Criteria<\/pre>\n