CDH Balanced Fund returns 33% to investors
CDH’s Balanced Fund returned 32.96 per cent to investors last year, making it the best performing mixed fund in that financial year.
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The impressive end-year performance was the result of diligent investment decisions which resulted in the fund manager channelling a chunk of investible funds into high-yielding instruments.
After pre-empting a depressed stock market in 2016, the fund’s managers reduced holdings in equities in favour of fixed income instruments whose rates rose on the back of a weak macroeconomic environment.
Consequently, 98 per cent of CDH Balanced Fund’s total investible funds were invested in fixed income securities, with only two per cent going into the purchase of shares on the Ghana Stock Exchange (GSE).
The allocation plan paid off, resulting in an annualised return of 32.96 per cent for 2016 compared to 30.68 per cent in 2015.
At its annual general meeting (AGM) in Accra, the Board Chairman of the CDH Balanced Fund Limited, Mr Emmanuel Adu-Sarkodee, explained that Funds Under Management (FUM) also rose by 73 per cent to GH¢1.87 million in December, last year, due to an impressive marketing and outreach effort by the managers.
He was optimistic the impressive results would encourage shareholders to increase their investments in the fund “in order to realise the secure financial future that they seek.”
Mobile collection
Currently, CDH Balanced Fund has secured the services of seven financial institutions to receive payments from investors and shareholders into their accounts.
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In spite of the varied nature of the receiving agents, majority of them do not have branches in peri-urban communities.
This prompted some shareholders at the AGM to implore on management to find an easier way of taking their contributions.
In response, the board chairman said the CDH Balanced Fund was currently piloting a mobile collection application, which, when launched, would make it possible for people to send their contributions in the comfort of their homes.
The application should be launched within the next 90 days, Mr Adu-Sarkodee said, explaining that its debut would help motivate more people to invest towards a secure future.
2017 Strategy
With the performance of the stock exchange improving on the back of a stabilising macroeconomic environment, the Fund Manager of the CDH Balanced Fund, Mr Seth Aryitey, said the CDH Balanced Fund would look to diversify its investments into more equities, in a bid to benefit from the bullish performance expected in the year.
The change tactics will also help to maintain the impressive end-year results of the fund, which started operations in 2015.
In the equities market, Mr Aryitey said, the fund would focus on picking bargain buys “that pay good dividends and are expected to post significant capital gains.”
“The progress towards a more balanced fund with a well-constituted portfolio will continue to be the focus of the fund manager,” he added.
The fund is managed by the CDH Asset Management Limited, a subsidiary of CDH Holdings.