Accra, June - GNA - Successive impressive performance of other African stock markets greatly helped the Data Bank's mutual fund, EPACK to minimize its investments risk against the negative impact of the decline in Ghana's stock market for the year 2005.
The EPACK Fund, which started 10 years ago with 250,000 cedis and five investors, is at present the only open ended mutual fund investing across the Continent in countries such as, Nigeria, Kenya, Uganda, Botswana and South Africa.
The value of the Fund, rose to 324 billion cedis in 2004, but fell to 254 billion cedis in the year 2005 largely due to bearish market trends on the Ghana Stock market leading to panic disinvestments.
Addressing shareholders at the seventh annual general meting in Accra, Dr Ken Ofori-Atta, Chairman of the Fund's Board, said the GSE index, fell by 26 per cent as against a 4.3 per cent fall by the EPACK.
He said the Fund's strategy of diversifying into other African markets did the magic to minimize its risk exposure adding: "For the fourth consecutive year, African capital markets emerged top in terms of price appreciation, ahead of markets in developed and other emerging countries."
The Fund price ended the year at 4,341 cedis, which was 4.3 per cent lower than the opening price of 4,536 cedis.
Dr Ofori-Atta explained that the overvaluation of most stocks on the GSE at the end of 2004, restricted investors options on the GSE in 2005 and the illiquidity or difficulty in disposing of shares made it difficult for the Fund to unwind its position in some local stocks to meet the cash needs of investors.
He said despite the bearish sentiments, the total number of shareholders actually grew from 29,000 at the end of December 2004 to more than 40,000 in December 2005.
Dr Ofori-Atta told shareholders that the underlying investments in EPACK portfolio were sound and well positioned for further impressive capital appreciation in the coming years.
Touching on the outlook of the Fund, he said the Management would scan the Continent in order to keep Fund returns above the market as well as to introduce additional benefits and services to augment the core investment management services.
He said arrangement would be made with local banks to enable shareholders to use their EPACK investments as collateral for bank applications. 22 June 06
