The two funds of the Stanlib Ghana Limited, Stanlib Income Fund Trust (SIFT), and the Cash Trust Fund (SCT) have both outperformed their benchmarks in 2017.
SIFT, which is an open-ended unit trust fund, churned out strong returns last year as it recorded a net return of 22 percent against a benchmark of 17 percent, with assets also growing from GHS21.7 million in 2016 to GHS 80 million last year.
The Cash Trust fund also returned 19 percent, 500 basis points above the benchmark of 14 percent.
Its asset under management (AUM) as at the end of 2017 also grew to GHS164 million from GHS28 million in 2016, representing a year on year growth in assets of 485 percent with earnings contributing 13 percent to the growth.
The fund also had about 70 percent assets in money market instruments with about 20 percent in government securities as at the end of 2017. The allocation held in cash and near-cash for liquidity purposes made up of 10 percent of AUM.
SIFT, since its inception in 2011, has consistently outperformed its benchmark, with full year returns for 2017 was 22 percent compared to a benchmark of 17 percent. SIFT’s full year distributable earnings grew by 170 percent to GHS8 million.
The fund’s performance is attributable to comparatively higher rates in corporate bonds and the tactical allocations into papers with maturities of more than two years.
The Fund Manager for SIFT, Mr George David Allotey, speaking at its annual general meeting (AGM), said the fund made increased investments in long-term instruments in 2017, in anticipation of interest rates decline.
“So we typically look at what our view on interest rates are going to be, whether we should invest in long term papers or short term papers. We took this decision about three years ago, so we actually position our funds for the longer term” he said.
The fund also revised its mandate in order to reflect its long term predominantly fixed income nature. As a result, it sold its investments in equities.
By Wisdom Jonny-Nuekpe