[2007-06-15]  Fund cheers money market
The Stanbic Investments managed Prudential Fund has cheered the money market, reporting a 34 per cent growth rate during last year, according to the Alexander Forbes industry survey.The fund, put up in April 2006, has attracted over P100 million, a feat Stanbic Investments’ Managing Director, Leina Gabaraane, deems was “much quicker than anticipated”.

He said this goes to defy the much touted view that Batswana lack a culture of saving. “It may be true that we lack a deeply entrenched savings culture, but this is not because Batswana are short-sighted or prefer spending to saving,” he said.

Alexander Forbes executives could not be raised to elaborate on their survey findings, especially the growth rate of the local money market.

Gabaraane says Botswana’s money market lacks appropriate savings products. The argument is not new anyway, because year after another, experts in the industry detail how offshore investment has become a priority area only because of lack of varied investment avenues. Presently, Botswana allows companies to take over 70 per cent of funds in their possession to be invested offshore.

The performance of the fund has spurred its marketers and managers, Stanbic Investments Botswana, to now consider fast tracking further investment range.

The good performance of the Stanbic Prudential Fund demonstrates that “Batswana are learning to assess investment risk,” says Gabaraane further noting that some categories of investors may have a stronger risk appetite than was previously thought.

The Fund is aimed at institutions, small pension funds and the private investor.

The fund manages work by risking and seeking growth by taking positions in a range of local and international instruments, such as equities, bonds and cash.

While it is a general understanding that investors accept a somewhat higher level of risk than a specialist money market fund, long-term returns are often expected to be even higher. Stanbic Investments Botswana began operations in 2003 and, a year later achieved its first big market place success with the launch of a Pula-based money market fund. The fund was aimed at conservative investors looking for the best short-term yield. And inflows topped P1 billion within 12 months, according to Gabaraane.

He said at first they launched a low risk product, then moved to moderate risk with the managed fund. Both have been highly successful, he said.

The good market performance of the fund has caused Stanbic to consider accelerating plans to test local demand for a pure equity fund – a unit trust that holds relatively high risk because of stock exchange volatility.

Source: The Botswana Guardian