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21 Nov 2022

Cash Trust and Income Fund Exceeds Benchmarks In 2021

Stanbic Investment Management Services (SIMS) recorded significant growth in both funds managed by the firm – Stanbic Cash Trust (SCT) and Stanbic Income Trust Fund (SIFT). This was announced at the 2021 virtual Annual General Meeting (AGM) held on Friday, July 15 2022.

The Stanbic Cash Trust (SCT) recorded a return of 13.7% which was 90 basis points above the benchmark return of 12.8%, with Assets under Management (AuM) of GHS638 million. The Stanbic Income Trust Fund (SIFT) also recorded a full-year return of 17.8% ahead of its benchmark of 16.9% and ended the year with AuM of GHS574.9 million.

Speaking at the event, the Fund Manager for the SCT , Brenda Kissi, said that the strong performance recorded was a result of the strategic and tactical positions adopted by the Fund in the past year. She said, “The strategic positions taken in high yielding government and quasi-government 6-month and 1-year papers accounted for the outperformance of the benchmark. Net investment income for the year increased by 64.7% to GHS84 million from GHS51 million in 2020.”

She added, “The Assets under Management at the end of 2021 were GHS638 million, which was 38% above that of 2020 (GHS463 million). The Fund’s growth in 2021 was driven by earnings of 51.9% and a net cash flow of 48.1%. At the end of 2021, 81.7% of fund assets were in Government and Quasi-Government securities, 12.2% in other money market instruments and 6.1% in cash and near-cash for liquidity purposes.”

Paa Kwesi Bleboo, Fund Manager for SIFT also mentioned that the Fund had recorded a 56% growth in AuM and explained the drivers of this growth. He said, “The Fund’s performance is attributed to comparatively higher rates in fixed deposits, corporate bonds and tactical allocations into medium-term government and quasi-government securities.”

Speaking about the year ahead, Mr. Bleboo mentioned that the Fund had developed strategies based on the economic outlook for the coming year. He stated that, “The potential downside risks to global economic growth in 2022 include an outbreak of different strains of the COVID-19 virus, the increasing pricing pressures from global spill-over, the Russian-Ukraine war, possible pressure on the currency and at least four rate hikes expected from the US FED. Based on these developments, the strategy for SIFT in 2022 is to closely monitor the interest rate curve to sustain fund returns with a focus on short-to-medium-term securities.”

Stanbic Investment Management Services Limited (SIMS), a member of the Standard Bank Group, is an investment management and advisory firm licensed by the Securities and Exchange Commission and registered with the National Pensions Regulatory Authority as a pension fund manager. SIMS is a multi-specialist asset manager that connects retail and institutional clients with multiple investment opportunities across asset classes and markets. It manages the Stanbic Income Fund Trust (SIFT) and Stanbic Cash Trust (SCT) which are unit trusts as defined in the Unit Trusts and Mutual Funds Regulations, 2001 (L.I. 1695).

The SCT is an open-ended unit trust fund with the primary objective of maximizing short-to-medium term income while preserving capital through investing in a portfolio of fixed interest securities including treasury securities and quasi-government securities and money market securities. The SIFT aims to maximize medium-to-long term sustainable income and capital appreciation, by investing in a portfolio of fixed income securities including government treasury notes and bonds, and corporate debt securities. SIMS’ client base consists of individuals, institutions, organisations and associations with various investment objectives. Investors may invest at regular intervals or in one-off lump sum investments.