HFC investment funds return positive growth
The value of each of the four investment funds of HFC Investments Services Limited, (HISL), a subsidiary of HFC Bank (Ghana) Limited, recorded growth in the 2013 financial year.
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The HFC Future Plan Trust recorded a yield of 31.37 per cent for the period ended December 2013 as against a yield of 18.19 per cent achieved in 2012.
The fund grew by 75.46 per cent over the 2012 figure and ended with GH¢3.28 million assets under management. The number of unit holders also increased by 133 over the period to close at 1,169.
Also, the portfolio strategy for the year was to maintain a portfolio mix of 60 per cent to 40 per cent in favour of equities to allow the fund to benefit from the bullish market.
According to the fund’s annual report, the fund manager undertook a profit-taking exercise during the third and fourth quarters of 2013 in order to realise the gains made.
In so doing, the equity portion of the fund fell to 35.66 per cent in the year under review. The realised gains from the disposed equities were placed into fixed income instruments with the aim of locking in rates as they begun to dip in 2013.
The HFC Equity Trust Fund also returned 70.43 per cent with assets growing from GH¢2.4 million to close the year at GH¢5.5 million, an increase of 129.26 per cent.
The asset mix of the fund in the period under review was predominantly characterised by blue chip equities at 65 per cent, and fixed income instruments comprising 18 per cent of the assets under management.
The total pool of investors as at the end of 2013 was 2,835, having grown from 2,603 in 2012.
The HFC Real Estate Investment Trust (REIT) managed to return a yield of 23.01 per cent in the year under review, considerably exceeding the average government bills and bond yields for 2013.
HFC REIT report showed that the provisional GDP estimates that the economy grew by 7.4 per cent above that of 2012, with the service sector recording the highest growth of 9.2 per cent.
The real estate sector, which is an integral part of the domestic economy, recorded a slowdown in the pace of growth than recorded for each year for the past five years, in comparison with Gross Domestic Products (GDP).
Having grown consistently from 3.99 per cent as a percentage of GDP in 2009 to 4.49 per cent in 2012, the sector witnessed a slump in 2013 by recording a growth rate of 4.38 per cent for 2013.
The sector relies heavily on imports and so key macroeconomic fundamentals, inflation, interest rate and foreign exchange prices impacted upon it in the year under review.
Also, investor confidence by new and existing investors also continued to soar throughout the year with the fund value increasing by 48 per cent to close the year at GH¢27.9 million.
As a money market fund, the HFC Unit Trust also compared favourably with the 91-Day Treasury Bill’s performance for the same period which yielded an average return of 21.92 per cent.
It closed the year 2013 with a yield of 23.07 per cent. This performance was also appreciably higher than the one-year government paper which averaged 21.16 per cent for the same period.
The total pool of investors in the fund as at the end of 2013 was 21,281 unit holders and this represented an increase of 1,175 new members over the 2012 closing figure.
Consequently, the asset base comprised primarily mini market instruments, dominated by fixed deposits with banks at 49.7 per cent.
Outlook for 2014
The General Manager of the (HISL), Mr Peter Larbi-Yeboa, at the annual general meeting in Accra, assured unit holders that the various funds would take a closer look at opportunities on the stock market by seeking opportunities in underpriced stocks, trade on fundamentals and engage in profit taking when deemed appropriate to do so.
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