CM Fund targets GH¢50m AUM in two years

July 28, 2017
Source: thebftonline.com l Ghana
CM Fund targets GH¢50m AUM in two years

CM Fund has set an ambitious target of reaching GH¢50million in total assets under management (AUM) by 2019 from the current value of GH¢3.5million.

The balanced fund, which posted a return of 22.87percent on investments in 2016, which was far above the capital market’s performance of -15.33percent within the same year, sees the target as achievable, as long as all marketing parameters are met.

Clarkson Duku Acheampong, the CEO of SDC Capital, the managers of the fund, told the B&FT in an interview, that the board of SDC Capital set the target with the view that for the past 10 years of the fund’s existence, it can do better than what it is doing.

“The board has noted that even though the fund started 10 years ago with GH¢50,000 and has now moved to GH¢3.5million, the growth has not been good enough.

When I joined the company, the AUM was GH¢326,000 and now I have moved it to GH¢3.5million. But now the task is to increase the AUM to GH¢50million or sell the fund to any other investment bank interested in managing it,” he said.

Conceding that it is a herculean task, Mr. Acheampong still believes, with all things being equal, it can be done.

“This is the target and effort must be shown. If the fund has grown from GH¢50,000 to GH¢3.5million in 10 years and I am able to move it to at least GH¢30million, that’s considerable,” he said.

He explained that to reach the target, it requires a lot of capital investment in advertising and marketing. “Over the years we couldn’t have passed on this cost to the scheme so now the board of SDC Capital has decided to take up this capital expenditure to adequately market the fund,” he noted.

Stronger partnership with GT Bank

The fund has signed a direct debit and walk in collection point partnership with GT Bank which now allows GT Bank to collect investments on behalf of the fund. “We believe that there is the need to create a platform which will be more convenient for our investors to contribute,” he said.

He added that the partnership goes further than collection of investments. It also, according to him, sees CM Fund stickers to be placed in all branches and outlets of GT Bank with the bank’s ATMs advertising CM Fund to clients.

Per a resolution passed by a unanimous decision at the annual general meeting (AGM), the fund has now made GT Bank its custodian, which according to Mr. Acheampong, will ensure the highest level of speed and attention required to conduct transactions,” he added.

Opportunities

With a positive outturn on the capital market in 2017, Mr. Acheampong noted that CM Fund is already taking strategic stakes in best performing stocks.

“This year the stock market has began to show growth in terms of returns and so it is for us to redirect some of our funds onto the stock market. We expect that with the market showing progress, and our strategy to diversify and take opportunities on the money market as well, we should be able to combine things and give great returns to shareholders,” he added.

Fund performance

The total returns for the CM Fund for the year stood at 22.27percent representing a growth of 2.58percent compared to a return of 21.71percent for 2015. Since inception in 2007, CM Fund has returned cumulatively 240.57percent to its shareholders as against the GSE – All Share Index return of 163.66percent.