Stanbic Income Fund beats benchmark indices

Stanbic Income Fund (SIF), a public assets fund, outperformed the market in the asset management sector up by 20.2% in 2011, the Fund managers said at its maiden annual general meeting (AGM) held in Accra.

The Fund, which started operating a little over a year ago with a value of GH¢1,000, ended the year trading at GH¢12,026.
“The Fund’s maiden return of 20.2% outperformed its benchmark indices. We outperformed our benchmarks mainly due to prudent buying of longer dated government paper before yields began their decline,” Kwabena Boamah, Portfolio Manager at Stanbic Investment Management Services, managers of the Fund said at the AGM.

SIF grew in assets by 609% from GH¢542,180.00 to GH¢3.8 million at the end of 2011.

The asset mix as at December 2011 was 67% in fixed deposits, 30% in bonds and 3% in equity. The number of unit holders grew by 119% to 552 from the initial 252 subscriptions at the start of the year.

The fixed income portfolio was diversified along the yield curve with 41% held in short-term paper, 38% in 1-year notes, and 18% in 2-year notes and 3% in the 5-year bond.

With the performance of 2011 as the yardstick, the fund managers are optimistic of another high yield in 2012 despite the fact that elections will be held this year.

“We expect 2012 to play out much like other election years.  In the light of this, the fiscal discipline seen in 2011 may be eroded with reverse trends in interest rates and inflation as government expenditure rises compared to that of previous years.

“With Europe’s fiscal crises not fully resolved, the cedi and the stock market could also be adversely affected if foreign investors decide to buy into safer assets like US Treasury Bonds. Financial stocks with favourable growth prospects might however provide positive surprises given their low price multiples and high dividend yields.

We will maintain our alpha generating strategy in the year ahead of playing along the yield curve, identifying appropriately priced fixed income, and diversifying the fund’s investment base to create more long term value for our valued clients,” Mr. Boamah disclosed.

The 2011 performance was situated in a stable macroeconomic environment in which the economy benefited from the production of oil, and higher cocoa and gold prices.

The AGM adopted a number of resolutions including the financials of the Fund. Other resolutions passed were the 2011 report of the Manager of the Fund, Trustees Report and the Report of Auditors for the year ended December 2011.

It also received and adopted the Audited Financial Statements for the year ended December 31, 2011.

Source: GNA