Republic Investment has expressed optimism for growth opportunities in 2024, following mixed results across its various funds for the 2023 financial year.
The company’s CEO, Madeline Nettey, provided insights into the performance and strategy during the recent annual general meeting.
The Republic Wealth Trust demonstrated resilience in a challenging economic environment, growing its net fund value by 23.61 percent to GHS8.69 million. The fund generated yields of 14.54 percent and 5.78 percent for its sub-Class (SC) and main trust respectively, attributed to active rebalancing strategies.
However, some funds faced significant challenges. The Republic Future Plan Trust saw its value decline from GH₵17.15 million to GH₵16.25 million, resulting in a negative return of 4.66 percent. This was primarily due to adverse movements in the Domestic Debt Exchange Program (DDEP) bonds and depressed bond prices.
The Republic Equity Trust fared better, recording a 4.28 percent growth in fund value to GH₵13.88 million.
Ms. Nettey noted, “Investor confidence in the equity market after a mixed performance in the bond market contributed immensely to the stock markets’ outstanding performance.”
The Republic Unit Trust experienced a dip in net fund value from GH₵ 360.32 million to GH₵324.32 million, largely attributed to discounted prices of DDEP bonds. However, the newly launched Unit Trust SC showed promise, achieving a return of 15.86 percent since its inception in April 2023.
Addressing the impact of the domestic debt exchange program, Ms. Nettey stated, “It did affect some portions of our portfolio, but not entirely. We had a diversified portfolio and investments in other acceptable financial assets.”
Looking ahead to 2024, Republic Investment is adopting a cautiously optimistic stance. Ms. Nettey emphasized the company’s proactive approach: “We have realigned our strategies and reviewed our risk appetite towards specific financial instruments. These are expected to largely position the funds under management in a very stable context.”
The company sees particular promise in the resurgence of the Ghanaian stock market. “Coming into this year, we have observed stronger returns on the stock market,” Ms. Nettey explained. “We are actively managing our portfolios that are linked to the stock market, and we believe that will aid in giving a consolidated net gain on those portfolios.”
Republic Investment is also eyeing opportunities presented by the upcoming election year in Ghana. Ms. Nettey acknowledged both the potential benefits and risks, stating, “From a government perspective, there’s a lot of liquidity that is released into the system, either for projects or for various needs to support the economy. However, it is also a time to be cautious about where to place funds, given the potential effects of the election.”
The company’s Real Estate Investment Trust (REIT) faced challenges in 2023, with a 9.57 percent dip in net fund value to GH₵60.15 million. Despite this, Republic Investment remains bullish on the real estate sector’s potential, citing Ghana’s rapid population growth and increasing urbanization as key drivers.
Ms. Nettey highlighted the importance of diversification in the current market environment. “We really appreciate the efforts from our regulators for bringing out guidelines to regulate other instruments or alternative investments on the market,” she said. “When it comes to investments, diversification is the currency.”
Republic Investment remains committed to active fund management and diversification strategies. With a cautiously optimistic outlook on Ghana’s economic recovery and emerging investment opportunities, the firm aims to deliver improved returns for its unit holders across its range of funds.
Ms. Nettey concluded by assuring shareholders of the company’s commitment to their interests: “Based on our risk management strategy, we cautiously analyze and conduct due diligence before taking any position to ensure the best interest of our unit holders.”
