HFC’s four investment trusts have braved the tough economic conditions alongside a weak performance by the Ghana Stock Exchange (GSE) to post impressive results last year, preparing the stage for better and stronger performances in the future.
The four trusts posted results that outpaced inflation and the GSE Composite and Financial Indices to restore confidence of unit holders in the future of these trusts.
With the restoration of a relatively stable economic climate in 2016, and an end to the three-year energy crisis, Chief Executive Officer of HFC Investments, Peter Larbi-Yeboa explained to unit holders that the future is brighter and fund managers are constantly and strategically monitoring market movements to record higher returns.
“We remain confident that your funds will once again do well in 2016, and therefore insist that you continue to invest in these funds as a key part of your investment portfolio to take advantage of the opportunities that will come up in the months and years ahead.”
HFC Future Plan Trust
The HFC Future Plan Trust’s assets grew by 16percent over the year, from GH¢3.79million to GH¢4.38million. This jump was attributed to the continuous patronage and investment returns.
Despite the bearish nature of the stock market, the fund managed to return a yield of 19.86percent against a yield of 12.14percent in 2014 while the number of unit holders increased from 1,330 to 1,406 in the year under review.
Moving forward in 2016, the fund’s Chief ExecutiveMr. Larbi-Yeboa noted that the fund intends to increase its equity holdings cautiously, but will remain active on the money market to optimise thefund’s yield.
“Strategies are also far afoot to boost the marketing activities of the fund in order to increase assets under management. The stock market is not expected to fare well in 2016, as a result we will seek to maintain holdings in specific stocks that have proven resilient and have good fundamentals. Overall, however, the balance will be in favour of the money market for 2016,” he said.
HFC Real Estate Investment Trust (REIT)
HFC REIT’s assets grew by 19.75percent over the year, from GH¢37.7million to GH¢45.1million.
The fund managed to return a yield of 24.26percent, which was significantly above the year-end inflation rate of 17.5percent.
The number of unit holders in the fund also increased from 4,833 to 5,575 between 2014 and 2015.
Mr. Larbi-Yeboa, who also serves as this trust’s CEO, explained that the REIT will continue to identify pockets of opportunity within the market to ensure the fund yields above average returns for its unit holders.
He added that, in the near-term, the REIT is pursuing the development of approximately 5000sqm of office space off Independence Avenue, with guaranteed tenancy for the available space to let post-construction.
In addition, the fund is in the process of concluding discussions to enable it commence constructing 1,400sqm of affordable residential units in the Nyaniba Residential Area.
“These two accretive projects with estimated valuations totalling US$6.6million are expected to be executed in 2016, and should significantly influence the holding of the fund.”
HFC Unit Trust
This fund also grew its assets by 30.34percent from GH¢60.73million to GH¢79.16million as at the end of 2015.
With an annualised yield of 25.76percent recorded to close the year 2015, it showed an improvement on the 22.38percent posted in 2014.
This performance compares favourably with the 12-month average for both the 91-day and 1-year GoG rates of 25.11percent and 22.51percent respectively; as well as within the industry.
The number of unit holders grew to 25,774 from 23,009 in 2014 to represent a 12.02percent growth.
The CEO, Mr. Larbi-Yeboa, remains optimistic about the fund’sgrowth and its associated positive returns.
HFC Equity Trust
The Equity Trustwas the only fund that saw a poor performance in 2015, but is still very optimistic about the future.
The fund, unsurprisingly, saw its assets drop by 10percent from GH¢5.76million in 2014 to GH¢5.17million in 2015.
But the fund manager strategically rebalanced the portfolio to ensure that the fund achieves greater success for unit holders.
The number of unit holders increased marginally from 3,023 to 3,069.
The fund portfolio was rebalanced in favour of the money market to mitigate increasing losses being suffered on the stock market.
Investments in stocks were reduced to 31.30percent by the end of 2015 from 63.38percent at beginning of the year.
During the same period, corporate bonds increased to 17.05percent from 9.32percent, and investments in short-term instruments also increased – from 20.98percent to 45.61percent.
Consequently, even though dire economic challenges prevailed in 2015 and the bear market persisted, the fund managed to return a yield of 14.49 percent in 2015 — substantially surpassing the GSE Composite and Financial Indices of negative 11.77percent and negative 13.98percent respectively.
The Mr. Larbi-Yeboa noted that over the last five years the fund has returned in excess of 150percent, which translates into a yearly average return of 25percent to its valued unit holders.
“We believe we are poised to deliver an even better performance in the coming years.”
Source: B&FT Online