Investec Unveils New Wealth Creation Avenue

MBONGENI MGUNI
Staff Writer | Monday March 29, 2010 00:00

 

Speaking to stakeholders at the unveiling of the CIU product range at GICC on Wednesday, Investec Managing Director Martinus Seboni said the fund manager had secured authorisation from the Non-Bank Financial Institution Regulatory Authority (NBFIRA) to offer the product range to individuals.

'It's been our wish to introduce our product range to individual investors because prior to this, we were dealing with retirement funds and corporates. Now that the regulator has authorised and approved our range, we are able to be here today. The road has been long and the process stringent.

'From now on, individual investors will be able to get on our investor base and we are very excited about this because many of you are clients through different organisations, but now you can grow your own wealth.'

While relatively unfamiliar to many, CIUs are emerging as the preferred vehicles for medium and long-term wealth creation and their growth rates and stability are favoured over traditional equity and other investment vehicles.

According to the CIU Act, CIUs can be defined as an arrangement whose principal objective is the collective investment of funds in real or personal property, including securities and other liquid financial assets, with the aim of giving members or unit holders the benefits of the result of the management of its funds, while spreading risk investment.

While CIUs or unit trusts have been in Botswana for years, they have generally been tapped into by corporates, pension funds and other institutional investors able to buy the amounts of units necessary to make the investment viable.

An example of the growth possible in CIUs can be seen in Investec Asset Management's Botswana-managed fund that has consistently exceeded international benchmarks since its inception last June.  The moderate risk fund thus provides its investors with long-term capital growth through a well-managed mixture of local and foreign investments. The Fund has averaged 18 percent growth since inception, while consistently staying above inflation - consolidating the returns to its investors.

Thus, investors could finance their children's education, put away a retirement nest egg, build property or pursue various usually expensive desires by investing in CIUs. The rate of return and volatility on most of these vehicles is much better than the stock market, which is still the most favoured among investing Batswana.

The new range of wealth creation products include the Investec Money and Bond funds, Investec Botswana Managed Fund, Investec Global Equity, Investec Global Strategic Managed and other currency and sub-funds.

Of particular interest to stakeholders at the unveiling was the Investec Botswana Managed Fund, the Pula denominated P134 million vehicle which is currently invested in assets such as equities, property, bonds and cash.

With a minimum lump sum investment of P10, 000, retirees and other medium to long-term investors can reap the benefits of a fund whose assets stretch across the world.

Investec investment professional, Johan Schreuder, said CIUs were a useful and flexible investment because their performance could be monitored daily, with withdrawals and additional investment possible daily. He said while CIUs were growing in Botswana, they were still far behind other established markets like South Africa where 904 unit trusts worth P75 billion exist.