Kwabena Boamah – Portfolio Manager of Stanbic Investment Management Services
Individual and institutional investors, who invested in the Stanbic Income Fund (SIF) in January, this year, saw their investment shoot up by 14.35 per cent as at June 30, this year.
The Stanbic Income Fund started trading on January 6, 2011 at a price of GH¢1.00.
As at the end of June 2011, the fund price increased to GH¢1.1435. The figure translates into a mid-year return of 14.35 per cent with an annualized return of 28.7 per cent.
“We hope to raise this figure to 18 per cent by the end of 2011,” the Portfolio Manager of Stanbic Investment Management Services, Kwabena Boamah told journalists in Accra on Tuesday.
As at June this year, the annual rate of return of the government’s Treasury Bill for 91 days and 182 days stood at 12.6 per cent while that of 1-year note and 2-year note stood at 12.7 per cent.
Mr. Boamah said the fund’s performance was propelled by its diverse fixed income portfolio with a heavy weighting on government bonds. The fund, he noted, also made investments in fixed deposits with a weighted average yield of 15 per cent.
“SIF currently has 41 per cent of the funds under management in government bonds, 50 per cent in fixed deposits and six per cent in equities,” he stated.
Currently, interest rates have declined and remain stable on the back of a single digit inflation and liquidity in the money market but Mr Boamah assured investors that the fund managers would continue to hold bonds at current yield and identify cheap short term paper with upside potential to improve returns.
“Equities would also be keenly looked at for value and income,” he stated.
SIF is a fixed income opened-ended unit trust offered to investors who are seeking to maximize short-term income as well as long-term substantial income and capital appreciation. The fund seeks to achieve its stated objective by investing 75 per cent of its assets in fixed income securities including corporate and government bonds, fixed deposits and other debt securities.
A maximum of 15 per cent of the fund would be invested in equities with five per cent of the assets in alternative instruments.
“The fund aims to achieve competitive returns on its assets while safeguarding capitals,” Mr Boamah noted, disclosing that the fund offers flexibility for investing in any business day and also offers liquidity for withdrawals at the investors’ request.
By Felix Dela Klutse