iPRO Growth Fund is an investment fund combining a majority of Mauritian, African and global equities, and a minority of fixed income investments aimed at reducing performance volatility.
The Net Asset Value of IGF increased by 3.8% in May 2021, as a result of positive contributions from both Mauritian and international equities. The largest gains came from the MCB Group, The Bee Equity Partners and African equities.
In Mauritius, the closure of borders has devastating economic consequences, with unsustainable debt levels for both the Government and the private sector. On 4th March 2021, Moody’s downgraded the Government of Mauritius’ long-term foreign and local currency issuer rating from Baa1 to Baa2 and maintained the negative outlook.
On 9th March 2021, Moody’s downgraded the long-term bank deposit and issuer rating of The Mauritius Commercial Bank Ltd to Baa3, also with a negative outlook. Unless we quickly see a reopening plan for the borders and bold measures to reduce the Government’s current expenditure without raising taxes, we fear that the rebound in local equities experienced in May 2021 could be short-lived.
Internationally, inflationary fears dominated the financial headlines in May. Many commodities prices have materially surged over the last six months, which should logically lead to higher prices for consumers, as confirmed by the April 2021 inflation figures published in the US.
However, US equities continue to shrug off negative news, boosted by the reopening of the economy following an intense vaccination campaign. Europe seems to follow suit, leading to increased levels of optimism in the developed world. Performance in emerging markets is more contrasted, with better results achieved in commodities exporting countries.