by Kofi Ahovi and Toma Imirhe
• HFC Equity Trust
• HFC Unit Trust
• HFC real Estate Investment Trust
HFC Investment Services Limited (HFC-ISL) manages three collective investment schemes, all of which are licensed unit trust schemes. This wholly owned subsidiary of HFC Bank has proved to be one of Ghana’s most professional investment banking institutions with an outstanding track record in asset management, where aside from managing collective investment schemes, it also provides prudent fund management, individual client investment service, fund management for groups and institutions, as well as endowment fund management.
HFC-ISL alongside Databank leads in the number of unit trusts it manages at three apiece. However, with regards to the diversity of business markets it invests them in , HFC-ISL is peerless, it invests in the capital market through the HFC Equity Trust, in the money market through the HFC Unit Trust, and uniquely, in the real estate market through the HFC Real Estate Investment fund (REIT).
Its expertise in fund management is clearly illustrated that all three funds are leaders in their respective areas of investment.
THE HFC EQUITY TRUST
The HFC Equity Trust invests primarily in equities, and to a much less extent preference shares which between them account for about two-thirds of the Trust’s total investment portfolio. The rest is invested in other funds, short term securities, bonds, and bank deposits, for purposes of portfolio diversification and liquidity, the better to ensure that members can cash part or all of their holdings within five workings days of serving notice, as guaranteed by the fund managers.
In 2007, just as in previous years, the HFC Equity Trust outperformed the benchmark Ghana Stock Exchange all share index by 2.35 percentage points, providing a yield for the year of 34.19%, compared against the all-share index 31.84% clinched for the year. In the previous year, the Trust delivered 12.46%, nearly three times the 4.87 managed by the all-share index, which tracks the (weighted) average price change for all the equities listed on the GSE.
This is the result of truly astute professional fund management, with consistency of outperforming the Ghanaian stock market that is unmatched by other equity funds. The key has been in the selection of equities that tend to grow the fastest. Indeed, the Trust’s equities portfolio reads like a wish-list for equity investors on the GSE. The HFC Equity Trust started the year with a portfolio that included CAL Bank, Enterprise Insurance and Ecobank Ghana as the stocks that made up the largest proportion of the portfolio, between them accounting for nearly 30% of the entire portfolio. The other stocks that accounted for the biggest 10 equity investment holdings were Standard Chartered Bank, Starwin Products, Ghana Commercial Bank, Ghana Oil Company (GOIL), Guinness Ghana, SG-SSB Bank and Golden Web, undoubtedly all of them are well established as blue chip stock and indeed ranking among the main propellants of the return of the bull market to the GSE.
This year, the Trust is once again living up to its billing, delivering year to date gain of 42.62% by mid September. Like with last year, that is impossible to beat by any investor running on individual or institutional investment portfolio of ones own so far thus year.
Little wonder then that astute investors are literally flocking to the HFC Equity Trust. In 2007 alone, the value of the fund grew by 79.62% to hit GHc 950,872.02.
HFC UNIT TRUST
The HFC Unit Trust has proved to be an excellent way to derive the best returns on investment possible from the money market. To do this HFC-ISL adopts an aggressive, but prudent approach aimed at overall improvement in annualized yield, size of the fund and portfolio strategy.
This is why last year the HFC unit Trust was the best performing money market collective investment scheme on the Ghanaian market in terms of yield.
The fund, in 2007 posted an annualized yield of 12.75 for the year, compared with 8.7% recorded in 2006.
This means the fund’s yield completely outperformed the benchmark Bank of Ghana Treasury notes recoded for last year. The notes on the 91 day Treasury bill and the one year treasury not were 2.17 and 0.14 percentage points below the yield on the HFC Unit Trust.
This impressive performance in 2007 was made possible by the fund managers continuous investment shift towards higher yielding fixed income investments.
This, during 2007 the proportion of the overall portfolio in government of Ghana bills, notes and bonds was drastically cut from 60.5% to 10.3% in response to falling interest rates on government securities through most of the year. Conversely, investment in corporate notes and bonds, as well as bank call fixed deposits shot up in as a proportion of the total portfolio, from 15.1% to 56.8% in the fund manager’s ultimately successful bid to maximize yield within on acceptable level of credit risk exposure.
Interest rate having risen sharply during the first three quarters of this year, the HFC unit Trust’s annualized yield is has reached new high too. By mid September it stood at 18.99%, which beats all but the shortest term government securities current offered yields, as far as money market instrument go like with the HFC Equity Trust, investors are increasingly turning to the Unit Trust to beat the averages on the money market. Last year the total number of unit holders increased by 6.5% from 12,652 to 13,509.
Additional investments made by both new unit holders and already existing ones propelled the gross value of the fund up by 13.8% from GHc13.1m at the start of 2007 to GHc14.9m by the end of the year.
The outlook for the rest of 2008 holds even more promise that the first three quarters of the year have delivered.
As the fund’s on-going investment product, the fund mangers are relocating resources into currently higher yielding short term instruments, particularly government securities.
HFC REIT
The HFC Real Estate Investment Trust is a unit trust scheme that is in class of its own being the only licensed collective investment scheme the invests in real estate in Ghana. More importantly for investors though is the fact that it is one of the best performing funds available in Ghana, providing better yields that are better than all the best performing equity funds.
In 2008 the HFC-REIT delivered a yield of 17.5% propelled by property development and property sales in Accra, Tema and Kumasi. The fund’s value also inched up from GHc1.29m at the beginning of the year to GHc1.4m by year end.
The agenda for 2008 holds even more promise, it include the completion and sale of houses at Cantoments in Accra, the completion of a two –storey complex at the African Union village and advancement of construction work on 30 semi-detached houses in Tema. Already, by mid September, the annualized yield on the HFC-REIT had reached new highs, of 28.39%
• HFC Equity Trust
• HFC Unit Trust
• HFC real Estate Investment Trust
HFC Investment Services Limited (HFC-ISL) manages three collective investment schemes, all of which are licensed unit trust schemes. This wholly owned subsidiary of HFC Bank has proved to be one of Ghana’s most professional investment banking institutions with an outstanding track record in asset management, where aside from managing collective investment schemes, it also provides prudent fund management, individual client investment service, fund management for groups and institutions, as well as endowment fund management.
HFC-ISL alongside Databank leads in the number of unit trusts it manages at three apiece. However, with regards to the diversity of business markets it invests them in , HFC-ISL is peerless, it invests in the capital market through the HFC Equity Trust, in the money market through the HFC Unit Trust, and uniquely, in the real estate market through the HFC Real Estate Investment fund (REIT).
Its expertise in fund management is clearly illustrated that all three funds are leaders in their respective areas of investment.
THE HFC EQUITY TRUST
The HFC Equity Trust invests primarily in equities, and to a much less extent preference shares which between them account for about two-thirds of the Trust’s total investment portfolio. The rest is invested in other funds, short term securities, bonds, and bank deposits, for purposes of portfolio diversification and liquidity, the better to ensure that members can cash part or all of their holdings within five workings days of serving notice, as guaranteed by the fund managers.
In 2007, just as in previous years, the HFC Equity Trust outperformed the benchmark Ghana Stock Exchange all share index by 2.35 percentage points, providing a yield for the year of 34.19%, compared against the all-share index 31.84% clinched for the year. In the previous year, the Trust delivered 12.46%, nearly three times the 4.87 managed by the all-share index, which tracks the (weighted) average price change for all the equities listed on the GSE.
This is the result of truly astute professional fund management, with consistency of outperforming the Ghanaian stock market that is unmatched by other equity funds. The key has been in the selection of equities that tend to grow the fastest. Indeed, the Trust’s equities portfolio reads like a wish-list for equity investors on the GSE. The HFC Equity Trust started the year with a portfolio that included CAL Bank, Enterprise Insurance and Ecobank Ghana as the stocks that made up the largest proportion of the portfolio, between them accounting for nearly 30% of the entire portfolio. The other stocks that accounted for the biggest 10 equity investment holdings were Standard Chartered Bank, Starwin Products, Ghana Commercial Bank, Ghana Oil Company (GOIL), Guinness Ghana, SG-SSB Bank and Golden Web, undoubtedly all of them are well established as blue chip stock and indeed ranking among the main propellants of the return of the bull market to the GSE.
This year, the Trust is once again living up to its billing, delivering year to date gain of 42.62% by mid September. Like with last year, that is impossible to beat by any investor running on individual or institutional investment portfolio of ones own so far thus year.
Little wonder then that astute investors are literally flocking to the HFC Equity Trust. In 2007 alone, the value of the fund grew by 79.62% to hit GHc 950,872.02.
HFC UNIT TRUST
The HFC Unit Trust has proved to be an excellent way to derive the best returns on investment possible from the money market. To do this HFC-ISL adopts an aggressive, but prudent approach aimed at overall improvement in annualized yield, size of the fund and portfolio strategy.
This is why last year the HFC unit Trust was the best performing money market collective investment scheme on the Ghanaian market in terms of yield.
The fund, in 2007 posted an annualized yield of 12.75 for the year, compared with 8.7% recorded in 2006.
This means the fund’s yield completely outperformed the benchmark Bank of Ghana Treasury notes recoded for last year. The notes on the 91 day Treasury bill and the one year treasury not were 2.17 and 0.14 percentage points below the yield on the HFC Unit Trust.
This impressive performance in 2007 was made possible by the fund managers continuous investment shift towards higher yielding fixed income investments.
This, during 2007 the proportion of the overall portfolio in government of Ghana bills, notes and bonds was drastically cut from 60.5% to 10.3% in response to falling interest rates on government securities through most of the year. Conversely, investment in corporate notes and bonds, as well as bank call fixed deposits shot up in as a proportion of the total portfolio, from 15.1% to 56.8% in the fund manager’s ultimately successful bid to maximize yield within on acceptable level of credit risk exposure.
Interest rate having risen sharply during the first three quarters of this year, the HFC unit Trust’s annualized yield is has reached new high too. By mid September it stood at 18.99%, which beats all but the shortest term government securities current offered yields, as far as money market instrument go like with the HFC Equity Trust, investors are increasingly turning to the Unit Trust to beat the averages on the money market. Last year the total number of unit holders increased by 6.5% from 12,652 to 13,509.
Additional investments made by both new unit holders and already existing ones propelled the gross value of the fund up by 13.8% from GHc13.1m at the start of 2007 to GHc14.9m by the end of the year.
The outlook for the rest of 2008 holds even more promise that the first three quarters of the year have delivered.
As the fund’s on-going investment product, the fund mangers are relocating resources into currently higher yielding short term instruments, particularly government securities.
HFC REIT
The HFC Real Estate Investment Trust is a unit trust scheme that is in class of its own being the only licensed collective investment scheme the invests in real estate in Ghana. More importantly for investors though is the fact that it is one of the best performing funds available in Ghana, providing better yields that are better than all the best performing equity funds.
In 2008 the HFC-REIT delivered a yield of 17.5% propelled by property development and property sales in Accra, Tema and Kumasi. The fund’s value also inched up from GHc1.29m at the beginning of the year to GHc1.4m by year end.
The agenda for 2008 holds even more promise, it include the completion and sale of houses at Cantoments in Accra, the completion of a two –storey complex at the African Union village and advancement of construction work on 30 semi-detached houses in Tema. Already, by mid September, the annualized yield on the HFC-REIT had reached new highs, of 28.39%
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