STANLIB Africa Income Fund

Transcription

1 STANLIB Africa Income Fund

2

3 Why an Africa-focused investment strategy? About STANLIB STANLIB is a Pan-African multi-specialist investment company, active in ten African countries. We have business partners in North America, the United Kingdom, Europe, the Middle East, and Asia. We manage USD37 billion assets under management and administration (ZAR 579 billion, as at 31 December 2015) and we have over retail and institutional customers across Africa. Our head office is in Johannesburg, with regional offices in other major urban centres around South Africa and in nine other African countries, with further expansion plans afoot. This gives us the knowledge that can only come from on-the-ground presence. In addition, we leverage our group presence on the continent, which complements our own. An increasingly compelling investment case Ghana Nigeria South Sudan Growing depth and breadth of domestic capital markets and investment opportunities Attractive portfolio diversification benefits and added alpha for a global portfolio Negative shift in safe haven status of developed world markets, post 2011 Growing portfolio investments in Africa by mainstream global emerging market funds Why the growing interest in Africa? Africa offers positive growth prospects: Improving political dynamics growing democracy Rapidly reforming business environments Positive demographic shifts large youthful population, growing urbanization Growing intra-regional trade Shifting mainstream perceptions of Africa globally there is a growing appreciation of Africa as a viable business proposition Growing investment in infrastructure Angola Namibia Democratic Republic of the Congo South Africa Zambia Botswana Zimbabwe Uganda Kenya Swaziland Lesotho Tanzania Malawi Mozambique Mauritius Standard Bank and/or Liberty STANLIB AFRICA INCOME FUND 3

4 Frontier Africa Fixed Income Markets We believe that Frontier Africa fixed income markets are relatively under-developed and highly inefficient. This provides tremendous opportunities for astute and wellinformed investors to generate attractive investment returns. Why are Frontier Africa Fixed Income Markets inefficient? Scarcity of issuance supply in corporate and to a lesser extent sovereign debt Low levels of secondary market trading/liquidity in corporate debt and long-dated government securities Undeveloped derivatives/repo markets Nascent and often fledgling regulatory regimes Limited availability of research/analytical coverage on market opportunities and trends As a result of this, mispriced securities exist and asset risks are often over-stated due to the limited availability of market information. This in turn provides positive asset valuation gaps. Over the longer-term, we expect these markets to gradually become more efficient as they develop in breadth and depth. Why include African fixed income in your portfolio? Attractive total returns and risk-adjusted returns Ѕ Higher yields than global and emerging market bonds Diversification benefits - allocating as little as 5% of a portfolio to African income funds, has the potential to improve the portfolio s risk/return profile STANLIB's Pan-Africa Fixed Income philosophy We follow a top-down macro-anchored investment approach, allowing for opportunistic sector allocations. This considers the most attractive investment opportunities available in each target market and allows for greater flexibility in managing the trade-off between risk and returns. We only invest in fixed income securities whose relative pricing provides a sizeable margin of safety over an investment horizon. We do not commit assets to excessive or unknown risks and have continuous oversight by the STANLIB Credit Committee. Asset allocation Initial deal screening Monitoring and risk management Portfolio construction Investment analysis Issuer selection 4 AFRICA INCOME FUND

5 STANLIB Pan-Africa Fixed Income Team Pan-Africa Fixed Income investment principles Pan-Africa Fixed Income Team The STANLIB Pan-Africa Fixed Income Team seeks to maximise total returns while prudently managing risks by: Investing in African countries with sound economic fundamentals, acceptable political risks and favourable macro-economic outlooks over the medium-term Constructing a portfolio consisting of rigorously selected fixed income securities driven by opportunistic sector allocations Producing consistently attractive total returns (periodic income and capital growth) on an annual basis Managing the volatility of returns by hedging currencies where practical and seeking to maintain relatively short-to-intermediate asset duration The above objectives require an active investment management style coupled with in-depth market knowledge, solid credit skills and active monitoring of markets and obligors. John Mackie As Head of the Pan Africa Franchise, John Mackie has overall investment responsibility for STANLIB s Pan-African investment strategies, outside South Africa. He holds a BCom(Honours) degree and has more than 31 years of industry experience. Lievin Mbuyamba joined the team as a Fixed Income Analyst and assists John with portfolio management. He holds a BCom(Honours) and is an FRM charter holder. Lievin is a CFA candidate, having passed Level II. He has more than five years of relevant industry experience. Lievin Mbuyamba STANLIB is the largest fixed interest asset manager in South Africa by asset size *. The scale of the assets is the result of our Fixed Interest Team being recognised as one of the best in the country. The STANLIB Pan-Africa Fixed Income Team is supported by the STANLIB SA Fixed Interest Franchise. *By asset market share as quoted by ASISA Quarterly Unit Trust Survey, 31 December 2015 AFRICA INCOME FUND 5

6 STANLIB Africa Income Fund Fund overview Seeks to maximise total returns whilst prudently managing risks - portfolio assets will be selected and managed with consideration of salient macro views, issuer fundamentals and available risk mitigation techniques (e.g. currency hedges), amongst other things Invests in listed and unlisted government and corporate debt securities, creditlinked notes, syndicated loans, structured notes, preference shares and money market instruments Name of fund Investment manager Asset class STANLIB Africa Income Fund STANLIB Asset Management Limited Fixed Income The portfolio may also from time to time, retain cash and/or place cash on deposit The fund will have a maximum modified duration of 5 years ASISA classification Regional - Interest Bearing - Short Term A single country's exposure is limited to 30%, whilst South African exposure will be capped at 20% The fund will invest predominantly in USD-denominated securities Investment universe Pan Africa (including South Africa) The fund is ZAR denominated, domiciled in South Africa and registered with the Financial Services Board under the Collective Investments Scheme Control Act ( CISCA ) Domicile Base currency RSA ZAR Benchmark USD-3 month LIBOR +5% per annum Restrictions on redemptions Redemptions of units amounting to more than 5% of the fund will be subject to a minimum notice period of 30 days 6 AFRICA INCOME FUND

7 Legal Notices Collective investment schemes in securities are generally medium to long-term investments. The value of participatory interests may go down as well as up and past performance is not necessarily a guide to the future. An investment in the participations of a collective investment scheme in securities is not the same as a deposit with a banking institution. Participatory interest prices are calculated on a net asset value basis, which is the total value of all assets in the Fund including any income accrual and less any permissible deductions from the Fund divided by the number of participatory interests in issue. Permissible deductions include brokerage, UST, auditor s fees, bank charges, trustee/custodian fees and the service charge levied by STANLIB Collective Investments (RF) Limited ( the Manager ). Where exit fees are applicable, participatory interests are redeemed at the net asset value where after the exit fee is deducted and the balance is paid to the investor. A Portfolio of a collective investment scheme in securities may borrow up to 10% of the market value of the Fund to bridge insufficient liquidity as a result of the redemption of participatory interests, and may also engage in scrip lending. Where different classes of participatory interests apply to certain funds, they would be subject to different fees and charges. A schedule of fees and charges and maximum commissions is available on request from the Manager. Commission and incentives may be paid and if so, would be included in the overall costs. The exposure limit to a single security in this Fund can be greater than is permitted for other funds in terms of the Collective Investment Schemes Control Act, 2002 ( the Act ). Details are available from the Manager. A Fund of Funds only invests in other collective investment schemes, which levy their own charges, which could result in a higher fee structure for these portfolios. A Feeder Fund only invests in the participatory interests of a single fund of a collective investment scheme apart from assets in liquid form. The Manager reserves the right to close certain funds from time to time in order to manage them more efficiently. More details are available from the Manager. Forward pricing is used. Fluctuations or movements in exchange rates may cause the value of underlying international investments to go up or down. The Manager undertakes to repurchase participatory interests at the price calculated according to the requirements of the Collective Investment Schemes Control Act, 2002, and on the terms and conditions of the relevant Deeds. Payment will be made within 14 days of receipt of a valid repurchase form. Any capital gain realized on the disposal of a participatory interest in a collective investment scheme is subject to Capital Gains Tax (CGT). The Manager is obliged to report on the weighted average cost method for CGT purposes. All portfolios are valued on a daily basis at 15h30, except for some Fund of Funds and Feeder Funds, which are valued at 17h00. Investments and withdrawals will receive the price of the same day if received prior to 15h30. The Fund Charges document (including the Performance Fee Frequently Asked Questions) is available on ( Investment for Individuals section). Contact details of Trustees: Standard Chartered Bank, 4 Sandown Valley Crescent, Sandton, Telephone +27 (0) STANLIB Collective Investments (RF) Limited Reg. No. (1969/003468/06) Liberty is a member of the Association for Savings and Investment of South Africa. The Manager is a member of the Liberty group of companies. Compliance Number: HX1319

8 17 Melrose Boulevard Melrose Arch 2196 PO Box 203 Melrose Arch 2076 T (SA only) T +27 (0) E contact@stanlib.com W stanlib.com GPS coordinates S , E