Stanbic Fund Returns 18.5% Growth
The Stanbic Income Fund (SIF) has recorded a growth of 18.47 per cent from the initial price of GH¢1 to GH¢1.1847 as of November 4, 2011.
Since January this year, the SIF, managed by Stanbic Investment Management Services (SIMS), has recorded 14.35 per cent growth as of half year when the price hit GH¢1.1435, and has now increased considerably to GH¢1.1847 at half year.
The Portfolio Manager, Mr Kwabena Boamah, attributed the Fund’s success to prudent management and a careful selection of high yielding assets.
He told media men that declining yields on government debt paper in the second half of the year had affected the growth of the fund in a way.
The SIF has a diversified fixed income portfolio, with a heavy exposure to government bonds.
Government’s Treasury bill for 91-days and 182-days averaged 12.6 per cent in the first half of the year but averaged nine per cent in the second half.
“Interest rates have declined, in line with market expectations and that is why we projected a return of 18 per cent but as of November 4, we had done 18.47 per cent,” Mr Boamah said, adding that with about a month to go before the end of the year, “we could hit the year end around 20 per cent or more.”
According to Mr Boamah, who is also the lead manager for SIMS’s portfolio, the Fund has achieved its objective by keeping more than 75 per cent of its assets invested in fix-income securities, including corporate and government bonds, fixed deposits and other debt securities and about five per cent in equities.
Fund Managers usually invest in fixed income securities to preserve capital and offer sustainable income over the period.
“In our efforts to preserve capital, we try not to invest in volatile instruments that will go up and down over a period. So we want something that will give us some form of safety in terms of the capital and also yields or gains,” Mr Boamah noted.
According to him, SIMS has adopted strategic measures to ensure that with the number of fixed instruments available at different tenors, they will be able to diversify the Fund well enough to ride the inevitable market volatilities.
“When we started the fund, we had more than 50 per cent of the funds in bonds and this has sustained the returns over the period so even though interest rates have gone down, we still have some pick up above the current returns on the market,” he added.
He said for the past two years, worldwide, both stock and bond markets had been experiencing low returns, making it difficult for investors to switch from one to another.
He thus advised investors to seek professional advice before taking any decision as to where and when to invest.
“It is more becoming incumbent on investors to seek professional advice before they make decisions. Even though the stock market has gone down, the market is actually good enough now for investors to lock-in funds and make better returns,” he added.