Blue Chip Journal, Issue 77

PORTFOLIO MANAGEMENT
NAVIGATING
SUCCESS
Blue Chip sits down
with Zisanda Gila from
Momentum Investments
Zisanda, you are lead portfolio manager at Momentum
Investments. Please share with our readers your journey that
led you to this point of your career.
I have been in the investment profession in different capacities for
over 15 years and my portfolio of responsibilities gradually evolved
over the years. My journey in the investment arena began when I
joined Metropolitan Asset Managers as a fixed-income dealer, and
I later moved to a money market analyst and co-portfolio manager
role working under supervision. In 2015, I started in my current role
as lead portfolio manager at Momentum Investments, managing
over R40 billion of assets across various money market strategies
within the fixed-income team.
From joining the financial services industry more than a decade
ago, I have found my career to be a fulfilling and meaningful one.
Coming from a family where perfectionism was encouraged, and
given my strong mathematical background, academically my
career was on course. However, the actual journey did not come
without its difficulties. Having someone in your corner and having
the right determination and the drive to succeed boosts your
chances of success in the industry. I have found mentorship to be
very pivotal to my career navigation. It has made me aware of my
strengths and developmental areas and encouraged me to take
opportunities that come my way.
Please tell us about the funds that you manage.
Our money market funds range from low-risk
cash funds to enhanced yield strategies. All
our funds aim to provide liquidity, inflation
protection and enhanced cash returns superior
to banks’ overnight deposit rates. We offer these
solutions in segregated portfolios, collective
investments and pooled funds across our assets
under management.
What is the strategy for these funds?
Our outcome-based investing approach
helps in solving for appropriate investment
outcomes and helps our clients understand
and articulate their needs and return
expectations. We construct our portfolios
to align with regulatory requirements
in the clients’ respective industries of
operation and ensure the clients’ objectives
are achieved by first formulating interest
rates views and aligning investments with
clients’ risk appetite and tolerance. We consider management
of risk to be a fundamental aspect of portfolio management. As
a result, significant emphasis is placed, within our investment
process, on the identification and monitoring of risk.
Fundamental credit research and analysis plays a defining role
in our asset selection and asset allocation decisions. This is key
and supported by our research to seek risk-adjusted returns from
the various curves and assets. Since credit risks can have many
layers, diversification is a continually moving target. I believe
diversification of strategies leads to more consistent returns over
time. We therefore buy a variety of asset classes from various curves
that meet our valuation and risk hurdles. This is the classical theory
of not placing all your eggs in one basket in practice.
Please outline their performance.
The performance of the portfolios is measured against the STeFI
benchmark, with an outperformance objective of up to 1.50%
above the benchmark. We strive to attain the highest possible
return on investment for our clients for a given (usually low)
level of risk, consistently over a long period. A highlight was the
Momentum Enhanced Yield Fund winning the Raging Bull Awards
in 2019 and 2020, as the “Best South African interest-bearing shortterm
fund on a risk-adjusted basis” over five-year periods. This
achievement has motivated and brought the team together in
pursuing a common purpose of delivering superior returns.
How has Covid-19 affected your portfolio of funds?
At the heart of our fixed-income strategies is daily liquidity
management. During the Covid-related sell-off in global financial
markets in March, our portfolios were not spared of the outflows
from underlying investors. There was a brief period in April when
the banks had excess liquidity, and we were able to sell back our
bank paper holdings to raise cash for these liquidity requirements.
There was also notable portfolio de-risking and asset class switches,
which resulted in cash neutral positions.
What is the outlook of the funds?
The funds’ strategy has been to invest in fixed-rate notes as
the interest rates continued to fall and the curve flattened. We
continued to increase duration as the market goes through periods
of risk-off. We remain cautious of credit quality but are finding
more attractively priced opportunities as spreads widen to our
fair value levels. We maintain hurdle rates in the different funds
through a combination of fixed and floating when valuation
supports our investment decision.
Zisanda Gila
“We consider management of risk to be a fundamental
aspect of portfolio management.” – Zisanda Gila