The Stanlib Income Fund Trust (SIFT) and Stanlib Cash Trust have recorded some significant gains by outperforming their 2017 benchmark.
The Stanlib Income Trust Fund yielded a 17.5% return against a benchmark of 15.6%, with assets growing by 190% to GH¢147million as against GH¢80million in 2017.
At the 8th General Meeting held in Accra, the Fund Manager for Income Fund, Mr. George David Allotey, said bonds made up 62% of the Fund’s assets with 13% in money market instruments and 19% in cash and near-cash securities as at the end of 2018.
He said investments in long-term instruments were increased ahead of expected interest rate declines in the latter part of 2018.
Mr. Allotey noted that the Income Trust Fund’s full-year distributable earnings grew by 26% to GH¢17.6million.
He said up to 70% of assets under management are invested in medium- to long-term corporate to government debts securities, while retaining a maximum 40% of money market securities and a minimum of 5% in cash.
The Stanlib Income Fund Trust (SIFT) is an open-ended unit trust fund that maximises short-term income as well as long-term sustainable income and capital appreciation of assets through investing in a portfolio of fixed income securities.
It also offers and redeems units to subscribers and from unit holders respectively, on an ongoing basis. Units are sold and redeemed at a price computed in accordance with terms of the scheme particulars.
The Stanlib Cash Trust made a 16.1% return with 250 basis points above the benchmark of 13.6%. Its asset under management at the end of 2018 grew to GH¢259million – up from GH¢166million in 2017 and representing a year-on-year growth in assets of 57%, with earnings contributing 34% to growth.
Net investment income for the year also increased by 82% to GH¢31million from GH¢17million in 2017.
The Stanlib Cash Trust is an open-ended unit trust fund that maximises short-term income while preserving capital through investing in a portfolio of money market securities – including Treasury bills, fixed deposits and certificates of deposits, and debt securities with maturity not exceeding 13 months.
Madam Brenda Kissi, Manager for Stanlib Cash Trust, noted that the Cash Trust had 22% of assets in money market instruments with about 61% in government securities as at the end of 2018.
She added that the allocation held in cash and near-cash for liquidity purposes made up 17% of assets under management.
Madam Kissi revealed that: “The tactical investment positions taken in 2017 in six-month and one-year papers accounted for outperformance of the benchmark, even though interest rates tapered in 2018.”
In concluding, she assured that the strategy for 2019 will be to continuously monitor the yield curve and take advantage of medium- to long-term high yielding government papers to improve the fund’s yield, while providing a minimal balance for liquidity.