Income fund attracts N$350m

THE Standard Bank Namibia Income Fund is proving to be a big winner for Stanlib Namibia and sister company Standard Bank Namibia.

The investment product innovators launched the fund in late February and within only five months, it has attracted inflows of N$350 million. Sue Holmes, director at Stanlib Namibia, said last week, “Pre-launch soundings in the marketplace indicated strong demand for a product with this structure.However, inflows into the fund far exceed our expectations.”The success of the income fund confirms the growing sophistication and maturity of the financial services market in Namibia.The market can be rest assured that we will continue to innovate to create products that respond to ever-changing client needs.”The income fund was introduced to meet Namibia’s growing appetite for fixed-interest instruments based on rigorous credit analysis that are tax-efficient and easily accessible yet deliver higher returns than savings products.This category of investment is generally expected to deliver a return about 100 basis points (one per cent) higher than the return on a money market instrument as the composition of the fund is more wide-ranging.Use of a wider range of instruments creates a slightly higher level of risk and explains why many investors believe an income fund fills the risk-and-return gap between managed funds and cash.The Standard Bank Namibia Income Fund invests in government and corporate bonds, gilt-edged securities, fixed deposits and money market assets.Fund rules stipulate that a minimum of 35 per cent of its assets must be invested in Namibia.Since its launch, the local asset allocation has often topped 50 per cent as Namibian bonds and securities have offered highly attractive yields.The fund is managed by Stanlib investment professionals in Windhoek and Johannesburg.Sue Holmes, director at Stanlib Namibia, said last week, “Pre-launch soundings in the marketplace indicated strong demand for a product with this structure.However, inflows into the fund far exceed our expectations.”The success of the income fund confirms the growing sophistication and maturity of the financial services market in Namibia.The market can be rest assured that we will continue to innovate to create products that respond to ever-changing client needs.”The income fund was introduced to meet Namibia’s growing appetite for fixed-interest instruments based on rigorous credit analysis that are tax-efficient and easily accessible yet deliver higher returns than savings products.This category of investment is generally expected to deliver a return about 100 basis points (one per cent) higher than the return on a money market instrument as the composition of the fund is more wide-ranging.Use of a wider range of instruments creates a slightly higher level of risk and explains why many investors believe an income fund fills the risk-and-return gap between managed funds and cash.The Standard Bank Namibia Income Fund invests in government and corporate bonds, gilt-edged securities, fixed deposits and money market assets.Fund rules stipulate that a minimum of 35 per cent of its assets must be invested in Namibia.Since its launch, the local asset allocation has often topped 50 per cent as Namibian bonds and securities have offered highly attractive yields.The fund is managed by Stanlib investment professionals in Windhoek and Johannesburg.