We study the approximation of a bounded matrix-valued function G on the unit circle by functions Q bounded and analytic in the unit disc. We show that if G is continuous then there is a unique Q for which the error G - Q has a strong minimality property involving not only the L∞-norm of G - Q but also the suprema of its subsequent singular values. We obtain structural properties of the error G - Q and show that certain smoothness properties of G are inherited by Q (e.g., membership of Besov spaces).