STANBIC IBTC MONEY MARKET FUND (SIMM)

QUARTERLY FUND FACTSHEET QUARTER 2: 2014

FUND FACTS
Fund Manager

X` P

FUND OBJECTIVE
Stanbic IBTC Asset
Management Limited

Launch Date

February 2010

Fiscal Year End

December

Status of Fund

Open Ended

Initial Investment

N50,000

Additional Investment

N50,000

Distribution Frequency

Quarterly

Handling Charge

0.5%of redemption proceeds

for withdrawals under 30 days

The primary performance objective of the Fund is to obtain as high a level of current income as is consistent with
capital preservation. The fund is for investors with low risk appetite who aim to maximize the current level of
income while preserving capital invested.
The Fund seeks to achieve its stated objective of delivering competitive returns investing 100% of its assets in
low risk short-term securities such as Treasury Bills, Commercial Papers, Bankers Acceptances, and Certificates
of Deposit with institutions that are rated not less than A by at least one recognized local rating agency
registered with the Securities and Exchange Commission.

INVESTMENT BENEFITS

Fund Rating

Aa (f) by Agusto & Co.

Bloomberg Ticker

STANIMM NL Equity

Bloomberg Ticker
Benchmark TTM

90-days

30 day rolling average yield

10.46%

60 day rolling average yield

10.73%

90 day rolling average yield

10.91%

RISK AND REWARD PROFILE

ASSET ALLOCATION AS AT 30 JUNE 2014

MATURITY PROFILE AS AT 30 JUNE 2014

Quarterly income streams

A well-diversified portfolio of fixed income instruments
Professional management
Competitive returns that rival fixed deposit
Capital preservation
Diversification to an existing equity portfolio
Direct debit initiative

INVESTMENT RISKS

Inconsistent monetary policy

Credit risk
Political risk
Interest risk

PORTFOLIO MANAGERS COMMENT

The Stanbic IBTC Money Market Fund which opened the quarter at a yield of 11.28%p.a. closed at 10.32% p.a as
at 30 June 2014.
At the beginning of the quarter, rates continued its downward trajectory as high banking sector liquidity persisted
in the absence of mop-up by the Central Bank of Nigeria (CBN) through issuance of Open Market Operation
(OMO) bills. The Federal Account Allocation Committee (FAAC) inflow and OMO/ treasury bills maturities to
the tune of circa N2.97trillion further heightened the level of liquidity in the system increasing the downward pull
of rates across the yield curve as rates hovered between 9.00% p.a. - 10.50% p.a. until mid-May when the CBN
resumed issuance of OMO auctions at circa 10.85% p.a. The Open Buy Back and Overnight rates averaged
between 10.00%p.a. and 10.25%p.a. respectively while the 91, 182 and 364 day Treasury bills which opened the
quarter at 11.900% p.a., 13.180% p.a. and 13.599 % p.a. declined by an average of circa 200 bps across the
curve to close at 9.9500% p.a. 10.2500% p.a. and 10.3490% p.a. respectively at the end of the quarter.
During the quarter, the Monetary Policy Committee (MPC) met under the chairmanship of the Acting Governor of
the Central Bank of Nigeria (CBN), Dr. Sarah Alade and decided to leave the monetary policy rate unchanged at
12% whilst maintaining the cash reserve ratio on public and private sector deposit at 75% and 15% respectively.
The committees decision was driven by relative stability seen in macroeconomic indicators; strengthening of the
Naira, recent external reserve accretion, below target inflation rate and strong economic growth outlook. In a
related development, Mr Godwin Emefiele assumed office as the new CBN governor and at his inaugural speech
he highlighted macroeconomic stability, a strong naira, gradual reduction in key interest rates and inclusion of
unemployment rate in monetary policy decisions.
The Fund Manager tactically invested in short-term maturities at decent yields due to the protracted excess
liquidity in the system for most part of Q2 2014. Following the announcement by the new CBN governor, that the
CBN will pursue a gradual reduction in interest rate, the market witnessed volatility and subsequent yield
compression at the short end of the curve. As such, the Fund Manager strategically extended duration by
investing at the mid-end of the curve at competitive yields in order to minimize re-investment risk. The Fund
Manager also increased allocation to money market securities where yields were priced above Treasury bill stop
rates.

INVESTMENT STRATEGY
We expect the CBN to maintain the policy rate at current levels while continuing its soft OMO issuance in order
to maintain liquidity at moderate levels and firm up the USD/NGN exchange rate even though exchange rate
remains under pressure due to structural imbalances between USD supply and demand.
Our strategy will be to focus on gradually extending duration in a bid to take advantage of relatively decent yields
obtainable on extended maturities. We will also position at the mid-point of the Treasury bill curve to take
advantage of any mispricing in the system buoyed by excessive liquidity preceding an election period. In
addition, the Fund Manager will take profit on short dated treasury bills and substitute with longer dated
securities that offer attractive yields in order to enhance the performance of the Fund.

EFFECTIVE YIELD
Q2 2014 T-BILLS STOP RATES

CONTACT US: Tina Mbagwu or Ehis Uzenabor: The Wealth House, Plot 1678 Olakunle Bakare Close Off Sanusi Fafunwa Victoria Island Lagos
P. O. Box 71707 Victoria Island Telephone: +234 (0) 1 2801266 Ext 2311 or 1423 Fax: +234 (0) 1 2805442, 2805443
Website: www.stanbicibtcassetmanagement.com