Fund yields are best now - investors told

The current high interest rates make it an opportune time to invest in trust-funds, General Manager of HFC Investments, Peter Larbi-Yeboa, has said.

“Investors should invest more in funds like this because they present them the opportunity to invest small amounts of money for good returns, both in the short- and long-term. The whole idea is to be disciplined and have a consistent approach to investment,” he said at the annual general meeting of the four units of the company: Unit Trust, REIT, Equity Trust and Future Plan Trust.

“We want to grow the fund by about 30% this year, and we will be doing it through the attraction of more investors and asking existing ones to invest more,” he added.

In 2012, the HFC Future Plan Trust recorded a yield of 18.19 percent. This yield was influenced largely by the bearish conditions on the Ghana Stock Exchange (GSE) in the first three quarters of 2012, as well as the need to rebalance the portfolio on account of the significant change in the term structure of interest rates.

“However, as a long-term fund with a minimum three-year investment horizon, I am pleased to note that the performance of the fund has surpassed the GSE All-Share Index over the past three years,” said Mr. Larbi-Yeboa.

The HFC Future Plan Trust began the year with a value of GH¢2 million but closed at GH¢1.9 million. In contrast, the number of unit holders increased by 8 percent from 956 to 1,036.

For the Equity Trust, its closing value was GH¢2.4 million compared to GH¢1.9 million in 2011. The net fund value saw a growth of 23.61 percent, with a yield of 29.62 percent. Unit holders also increased by 24 percent to 2,603.

The Units Fund grew by 13.34 percent from GH¢31.35 million to GH¢35.53 million and 1,211 new unit holders were added, bringing in a total of 20,106 unit holders at the end of 2012.

The fund structure over the period was dominated by fixed deposits and placements at 48.88 percent, followed by 30.97 percent investment in Government paper. Holdings of corporate notes and bonds stood at 10.54 percent.

With interest rates surging in the course of the year, the equities portfolio was reduced in favor of fixed-income instruments, leading to a decline in the fund’s equities investment from 7.06 percent at the end of 2011 to 2.72 percent at the end of 2012.

The Real Estate Investment Trust (REIT) managed to return a yield of 22.87 percent, which was above the average yield on the one-year Government paper for the same period.

The fund’s value increased by 70 percent to end the year at GH¢18.87 million. The total pool of investors in the fund at the end of 2012 was 3,257.