EDC Investment funds make modest gains
The two investment funds of the EDC Investments Limited, the EDC Ghana Balanced Fund and the EDC Ghana Fixed Income Unit Trust, ended 2015 with some modest gains despite the negative performance of the general stock market.
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The Fixed Income Fund made a return of 27.3 per cent in 2015, representing a 24.92 per cent improvement on its 2014 performance. Since its inception in August 2012, the fund has recorded a cumulative return of 111.90 per cent, as at the end of 2015.
Addressing shareholders at an annual general meeting (AGM) in Accra, the Portfolio Manager, Mr Frederick Semenu Duvor, said the assets of the fund under management in 2015 more than doubled with a growth of 275 per cent, bringing the year end assets under management to GH¢37 million.
“The fund recorded total inflows of GH¢33.8 million and outflows of GH¢10 million, resulting in a net inflow of GH¢23.8 million. The client base of the fund grew by 90 per cent, bringing the total number of clients to 7,999 as at the end of 2015,” he said.
He further explained that the fund remained well within its mandate to invest 100 per cent of its assets in fixed income securities, adding that about 67 per cent of the funds were invested in short-term fixed income securities with a maturity period of one year or less.
EDC Ghana Balanced Fund
The Portfolio Manager of the EDC Ghana Balanced Fund, Ms Afua Akyaa Osei, said the fund recorded a marginal increase from GH¢23.14 million in 2014 to GH¢25.65 million as at the end of 2015.
The return on the Fund was 15.92 per cent, which was more than 10 per cent above the benchmark return of 5.37 per cent for the year.
“Despite the negative performance of the stock market, your Fund continued with its strong track record of positive returns. Cumulative returns on the fund since inception in April 2009 till December 29, 2015 is 269.19 per cent,” he said.
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She explained that the slow growth of the fund was as a result of the negative performance of the stock market, adding that “negative stock market performance over the past 18 months has caused general investor confidence in the stock market to wane”.
Outlook for 2016
Ms Osei said the strategy for 2016 was to maximise yields in fixed income instruments as it anticipated that low investor interest on the market will delay price discovery and affect the returns on the larger stock market.
“Our strategy, therefore, will be to maximise yields in fixed income instruments while taking positions in value stocks in anticipation of market correction. While the stock market outlook remains bearish, we are optimistic that your fund will yield positive returns and will remain strategically positioned to take advantage of the stock market recovery,” she said.
The managers of the two funds said they would remain defensive in the market and concentrate at the short end of the yield curve where yields are highest, while gradually increasing the duration of the portfolio as yields on longer dated securities become more attractive.