Futuregrowth sees value in South African government bonds with 12- to 20-year maturities
TLT•Futuregrowth Asset Management sees South African government bonds with 12- to 20-year maturities as attractive, citing prospects for fiscal consolidation. It expects interest rates to pause, though one or two further repo rate increases remain possible.
1. Bond outlook
Futuregrowth Asset Management sees South African government bonds with 12- to 20-year maturities as attractive, supported by fiscal consolidation prospects. It says a reversal of fiscal consolidation or deteriorating political stability could push long-end yields higher and erode returns. Corporate credit spreads have compressed as demand outpaced supply, while government bonds offer greater liquidity. Blending shorter- and longer-dated bonds can align duration with client risk profiles, reducing reliance on a single market view.
