SIMS’ Cash Trust Fund Assets Grow By 2.4%: Improves Liquidity on Income Trust Fund
Stanbic Investment Management Services (SIMS) has reported a 2.4% growth in its Assets Under Management (AUM) on its Stanbic Cash Trust (SCT) for the year 2023, compared to the previous year of GHS430.3 million.
This growth was highlighted in the company’s annual report presented at the Annual General Meeting (AGM) held at the SB Incubator in Accra. According to the report, “The Fund ended 2023 with total Assets Under Management (AUM) of GHS430 million, split between GHS248.7 million for the main class and 181.6 million for the sub-class. The Fund had about 51% of its assets in bonds, 35% in money market securities, and 14% in cash and near cash.”
This growth notwithstanding, the Fund experienced an underperformance as a result of higher yields on treasury bills. According to the report, “The Fund's underperformance is attributed to higher yields on treasury bills outpacing returns from the new bonds held by the Fund, large withdrawal amounts during the period, and the significant impact of the economic crises on capital markets.”
SIMS’ other Fund, the Stanbic Income Fund Trust (SIFT), improved its liquidity position from 4.4% of AuM in 2022 to 5.3% in 2023. This represented the portion of the portfolio in cash and near cash at the end of the reporting period. In addition, the Fund had 8.4% invested in money market securities with the remaining 86.5% invested in bonds.
The Fund ended 2023 with AuM at GHS380.6 million representing a 24% decline from the previous year. The report noted that, “The main class posted a decline of 18.71% based on the mark-to-market valuation of the portfolio’s assets, whilst the sub-class (AMC) posted a gain of 18.66%. The main class posted an unrealized loss of GHS 78.3M in 2023 compared to a net gain of GHS 71.5M reported in 2022, attributed to the elevated yields and discounted prices on the newly minted DDEP bond exposures, given the challenging macroeconomic conditions in 2023.”
In 2024, SIMS strategy for the SCT is to remain conservative. The company reports that it will focus on investing in high-quality money market securities to enhance liquidity, while providing stability amidst market uncertainties. The strategy for SIFT, according to the company, is to stay conservative by investing in money market securities and reducing exposure to bonds when market conditions improve.
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.