Stanlib Income Fund Trust (SIFT) and Stanlib Cash Trust, the two investment funds of Stanlib Ghana Limited recorded strong growth in the 2017 financial year.
The total assets of SITF recorded a 260 per cent growth to GH¢80 million in 2017 from GH¢28.4 million in 2016 while assets of cash trust recorded growth from GH¢28 million in 2016 to GH¢164 million in 2017.
The two funds, in the year under review, also outperformed their benchmarks.
SIFT recorded a return of 22 per cent, against a benchmark of 17 per cent while the Stanlib Cash Trust recorded a return of 19 per cent, against a benchmark of 14 per cent.
SITF’s full year distributable earnings also recorded growth by 170 per cent to GH¢8 million.
Addressing unit holders at the Funds’ seventh Annual General Meetings (AGMs) in Accra on Friday, Fund Manager of SITF, George David Allotey, said the SITF’s performance was due to comparatively higher rates in corporate bonds and the tactical allocations into papers with maturities of more than two years.
He said investments in long-term instruments were increased ahead of expected interest rate decline.
On expectation for this year, he said the equities market was anticipated to continue its surge in 2018 amid low interest rates, improving balance sheets of banking stocks as well as positives in the macroeconomic environment.
“The expected GDP growth of 6.8 per cent as projected by the government for 2018 is within range. The industrial sector is expected to drive this growth on the back of improving power supply and oil production. A stable currency and positive inflation outlook should see the policy rate decline further in 2018. These conditions, if reached, will grow the equities market,” he noted.
In the quarters, Mr. Allotey said the fund would continue to reduce its exposures from money market into longer dated papers and keenly monitor the yield curve with the view to balancing returns and liquidity.
He explained that the repositioning was expected to bolster the fund’s return.
Madam Brenda Kissi, Fund Manager of Stanlib Cash Trust, said in the year under review, the fund returned 500 basis points (five percentage points) above the benchmark of 14 per cent.
“The tactical investments in six months and one-year papers while interest rates tapered accounted for the performance of the benchmark. Net investment income for the year also grew by 300 per cent to GH¢17 million from GH¢4 million in 2016. Declines in the interest rates on the short end of the market impacted 2017 Fund returns compared to that of 2016,” she added.
By Claude Nyarko Adams