NCB Cap Markets launches unit trust

BY SHAMILLE SCOTT Business reporter

Wednesday, December 11, 2013    

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NCB Capital Markets has started offering three unit trust products.

For now, the funds will invest in long-term corporate and government debt instruments as well as local and regional stocks via the M Fund, for money market, B Fund (bonds) and E Fund (equities).

And even though real estate is not currently being considered, the fund manager is not opposed to the idea.

"Offering a real estate portfolio is something we are not averse to, as we already have real estate management expertise residing in the pension fund management arm of the group," said Steven Gooden, CEO of NCB Capital Markets.

The main strategy for the equities-based unit trust fund is to target undervalued stocks in companies with attractive dividend yield as well as companies with strong growth potential, according to Gooden, who said that the company would primarily target local and regional stocks.

"The money market fund consists primarily of short-term liquid securities, while the bond fund has longer- term debt securities which provide a higher rate of return," he said.

The money market fund won't carry a front-end load — the price difference between buying and selling a unit — while the spreads for the bond and equities funds will be two per cent and four per cent, respectively.

Gooden declined to comment on the expected take-up of the products, but said the company has put the infrastructure in place to help meet its targets.

"The portfolios will be managed in a manner that generates returns that are consistent with the level of risk appetite of each product portfolio," he said. "Our target returns are benchmarked against a margin above t-bill yields and the JSE Index, depending on the fund. Our objective is to be in the top quartile of fund managers where portfolio returns are concerned."

Fundamentally, unit trust funds allow investors to participate in a wider variety of asset classes without the need to invest large amounts up front to earn attractive returns on their funds.

Gooden added that NCB Capital Markets has an excellent track record, demonstrated by the consistently high returns generated on its balance sheet that now exceeds $115 billion in total assets.

Furthermore, the 32 branches operated by the fund manager's parent, National Commercial Bank, will further drive customers to buy into the unit trusts.

"We want to utilise that strength by providing a value-added product that meets various financial needs regardless of the investor's stage of life," said Gooden.

Prior to the launch there were 18 unit trust products being offered by four fund managers — Barita, Scotia, Sagicor and JMMB. Their 12-month growth rates up to December 4 ranged from a decline of 4.42 per cent to a gain of 10.38 per cent.





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