The Stanbic Income Fund (SIF) has made an 18.47% growth in the first 11 months of 2011.
SIF, managed by Stanbic Investment Management Services (SIMS) started trading in January this year at a price of GH¢1. This increased considerably to GH¢1.1435 at half year and to GH¢1.1847 as at first week of November 4, translating into a year-to-date return of 18.47 percent.
Portfolio Manager at SIMS, Kwabena Boamah, puts the Fund’s success so far to prudent management and a careful selection of high yielding assets.
He said declining yields on government debt paper in the second half of the year had affected the growth of the fund in a way.
Government’s Treasury bill for 91-days and 182-days averaged 12.6 percent in the first half of the year but averaged 9 percent in the second half.
“Interest rates have declined, in line with market expectations and that’s why we projected a return of 18% but as at November 4, we had done 18.47%. We still have more than a month to go before the year ends so we could hit the year end around 20% or more” he said.
According to Kwabena Boamah who serves as the lead manager for SIMS’s portfolio, the Fund has achieved its objective by keeping more than 75 percent of its assets invested in fix income securities including corporate and government bonds, fixed deposits and other debt securities and about 5 percent 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”, Boamah noted.
According to him, SIMS has adopted strategic measures to ensure that with the number of fixed instruments available at different tenors, they were able to diversify the Fund well enough to ride the inevitable market volatilities.
“When we started the fund we had more than 50% 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.
Boamah observed that for the past two years, worldwide, both stock and bond markets have 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’s 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.
SIF, managed by Stanbic Investment Management Services (SIMS) started trading in January this year at a price of GH¢1. This increased considerably to GH¢1.1435 at half year and to GH¢1.1847 as at first week of November 4, translating into a year-to-date return of 18.47 percent.
Portfolio Manager at SIMS, Kwabena Boamah, puts the Fund’s success so far to prudent management and a careful selection of high yielding assets.
He said declining yields on government debt paper in the second half of the year had affected the growth of the fund in a way.
Government’s Treasury bill for 91-days and 182-days averaged 12.6 percent in the first half of the year but averaged 9 percent in the second half.
“Interest rates have declined, in line with market expectations and that’s why we projected a return of 18% but as at November 4, we had done 18.47%. We still have more than a month to go before the year ends so we could hit the year end around 20% or more” he said.
According to Kwabena Boamah who serves as the lead manager for SIMS’s portfolio, the Fund has achieved its objective by keeping more than 75 percent of its assets invested in fix income securities including corporate and government bonds, fixed deposits and other debt securities and about 5 percent 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”, Boamah noted.
According to him, SIMS has adopted strategic measures to ensure that with the number of fixed instruments available at different tenors, they were able to diversify the Fund well enough to ride the inevitable market volatilities.
“When we started the fund we had more than 50% 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.
Boamah observed that for the past two years, worldwide, both stock and bond markets have 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’s 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.
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