- Targets high net worth individuals
Catherine Lesetedi, the CEO of Botswana Insurance Holding Limited (BIHL), says there are more opportunities for the group’s asset management unit to harness savings in the unit trusts space, diversifying from asset management.
Lesetedi noted the constraints in terms of asset management space which has become very competitive. She also note that a big concentration risk in terms of assets that sit in that space.
Even so, its asset management unit, Botswana Insurance Fund Management (Bifm), has seen a steady increase in Asset Under Management (AUM) over the past five years. During the full-year ended 31 December 2021, total AUM increased by 19 percent to close the year at P36 billion, including Zambia’s at P5.2 billion. However, Lesetedi’s concern is that “there are a lot more asset managers than maybe life companies”.
As she reflected on Botswana Life and its ability to harness discretionary incomes, she saw where some of the growth for Bifm could come from. Lesetedi said the group is looking at growing and focusing on harnessing savings and investments from high net-worth individuals and believes they (Bifm) have a platform for that. “I also want to believe that when you look at the unit trust space, there is still opportunity to really service retail market very well to harness savings,” she said.
The question she ponders is what is the best way to market, how do they simplify processes, and how do they make customer engagement easy for a customer to save that little bit of money? “We need to focus on how we market, simplify processes and how we become effective at distribution in the retail space,” she said, demonstrating the massive retail space in South Africa. As at 31 December 2021, Bifm Unit Trust stood at P1.7 billion. The asset management segment which provides asset management services to its customers through Bifm, and Bifm Unit Trusts are both subsidiaries of the BIHL Group.
Bifm Unit Trusts offer Balanced Prudential Fund, Letlotlo Education Fund, Local Equity Unit Trust Fund, Pula Money Market Fund and Ya Masa Junior Fund. According to Bifm, Balanced Prudential Fund provides long term capital growth by investing in a diversified range of assets with moderate risk profile and caters for the needs of the investor with a medium-long term investment horizon. Bifm Balanced Prudential Fund returned 5.16 percent over the fourth quarter of 2021, according to its quarterly fact sheet. Over the 12-month period, the Fund returned 14.09 percent, outperforming the benchmark return of 13.60 percent by 0.49 percent.
Letlotlo Education Fund provides a degree of long-term capital growth by investing in a diversified range of assets. It has a moderately low-risk profile which provides a small degree of risk and volatility for some degree of growth. The seven-year lock-in period caters for investors with a long-term investment horizon, according to the asset manager. The Bifm Letlotlo Education Fund returned 4.04 percent over the fourth quarter of 2021. Over the 12-month period, the Fund returned 8.60 percent.
Bifm says the Local Equity Unit Trust Fund aims to provide capital growth and create wealth over the long term by investing mainly in listed local equities. The Fund is high risk and targets investors with a high risk appetite and a long-term investment horizon. The Bifm Local Equity Unit Trust Fund finished the year off with a positive quarter, with a return of 3.81 percent.
Pula Money Market Fund provides return and liquidity through allocation mainly to short-term investments. The Fund is relatively low risk and caters for the low risk investor. Over the last quarter of 2021, the Fund returned 1.44 percent, significantly outperforming the benchmark return of 0.15 percent. On a 12-month basis, the Fund returned 4.97 percent, an outperformance of 441 basis points over the benchmark which returned 0.56 percent for the same period.
Ya Masa Junior Fund provides long-term capital growth by investing in a diversified range of assets. It has a moderately high-risk profile and a seven-year lock-in period which caters for investors with a long-term investment horizon who are comfortable with accepting some degree of risk and volatility for some degree of growth. The Bifm Ya Masa Junior Fund returned 6.02 percent over the fourth quarter of 2021. Over the 12-month period, the Fund returned 17.37 percent.