StanbicIBTC Funds pull N35b as investors diversify into bonds
Category: Investors NewsBeat
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.