Balancing risk and return requires moving beyond conventional defaults when structural global forces trigger rapid market shifts. May 2026 demonstrated this reality clearly, as international markets experienced AI-driven equity expansion and falling energy prices, while South African exchanges faced localised resource sector pressure offset by a stronger rand and resilient domestic bonds. For wealth managers, protecting capital beneath these shifting layers requires an investment manager operating with strict operational discipline.
In our latest monthly fund update, our head of retail distribution, Nico Janse van Rensburg, is joined by Malcolm Charles, portfolio manager from NinetyOne, the sub-advised partner manager on the Amplify SCI Stable Income Retail Hedge Fund. Marking just over twelve months since the strategy’s partnership launch, the conversation provides a timely assessment of how macro-driven retail hedge funds insulate investor portfolios when sudden shocks upend traditional asset channels.
The discipline of systematic preservation
While the strategy evaluates opportunities across the macro landscape with high conviction, its core success is anchored in an unwavering focus on capital protection. This active risk framework was severely tested during the high-volatility window of March 2026, when escalating geopolitical conflicts drove the domestic bond market down significantly. While traditional benchmarks experienced steep corrections, the fund remained flat, delivering a resilient 0.2% return for the month.
This preservation was not a product of luck. As Malcolm notes, the strategy systematically implements option protection as a non-negotiable structural baseline. By rolling dollar call options and bond put options continuously, the portfolio construction automatically reduces duration and increases defensive allocations when unexpected market pressures accelerate. Paired with deliberate profit-taking immediately following the February national budget, this risk control allowed the team to protect capital without sacrificing long-term compounding potential.
Positioning for structural inflection
Looking ahead into the second half of 2026, the strategy remains conservatively positioned in the short term, holding a robust allocation to high-yielding credit to eke out consistent returns while near-term market uncertainties resolve. However, the medium-term outlook for South African fixed income is increasingly constructive.
Recent ratings outlook upgrades from S&P, Moody’s, and Fitch signal institutional acknowledgment that domestic structural reforms across energy and logistics infrastructure are beginning to bear fruit. With foreign capital starting to return to domestic markets, valuations are becoming highly attractive. Rather than maintaining an underweight stance, the team is actively preparing to rebuild high-conviction bond positions over the next one to two months, positioning the fund to capitalise directly on a strong fixed income recovery.
True investment advantage belongs to those who maintain the patience to wait for clear opportunities and the active discipline to protect capital while waiting.
