November 17, 2011

The various  funds managed by StanbicIBTC Asset Management have yielded  about N35 billion into the pool, an indication that many investors who lost money in the equities market by investing directly are beginning to  diversify into fixed income  through fund managers.

The funds are  bond  fund, ethical fund, guaranteed investment fund, equity funds and  balance fund. Mike Olumide, managing director of Stanbic IBTC Asset Management  said the value of the funds pulled in is in excess of N30billion.

‘What I will tell you is that collectively the funds  are   in excess of 30 billion or just under  35 billion’, Olumide said.

The oldest and the most successful is the Stanbic IBTC Equities Fund. As the name suggest,  the fund  has  equity as its underlying asset. It is also an aggressive fund.

For the ethical fund, the main difference is that investors  invest in companies that engage in socially responsible activities or for  sectors  are not considered socially harmful.

The company also manages guaranteed investment fund which is for clients that are concerned about downside risk. ‘The proposition in the fund is that if an investor invest in it for 3 months or longer, the worst case scenario is that he  will get back his  capital’, according to Olumide.

So the fund has the ability to invest a  small portion up to 25% in the capital market but in period of bearish market  like in 2009  when the market was down, minus 45 percent  no matter how much the market loses,  the worst case scenario is that an investor in that particular fund will cover  his  principal back.Thus, the advantage is that the fund caps investors  downside  and  also allows them  to enjoy the upside  in underling instruments. The Trust Deed for the fund allows a minimum of  75 percent in fixed income investment which include Treasury Bills, money market while a maximum of 25 percent  is permissibly in equities.

The fifth fund is the bond fund that have  bonds especially  federal government bonds as underlying assets.

Stanbic IBTC Asset Management also  recently got approval for a sixth fund which is called the Stabic IBTC balanced fund. The fund is for investors who want a balance  between fixed income and equities.
 

Source: Businessday
 

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