- Bonds and mutual funds are among options available for investment
Standard Chartered Bank Botswana has availed a range of solutions for its affluent customers to diversify their investment portfolios.
According to the bank’s Head of Affluent and Wealth Management, Setshwano Ngope, it became clear from surveys that StanChart conducted that clients want to maintain their lifestyles even in retirement. Because they are still active, their asset allocation should be about tomorrow’s needs, she added.
Ngope was sharing insights on in Gaborone this week. “Because you are still active and able to generate an income and build your balance sheet, it should lead you to how are you going to be living tomorrow,” she said. “This is how we should be thinking when we allocate funds to asset classes such mutual funds and fixed income.”
According to Ngope, the financial services market in Botswana has evolved from the only readily available investment product being insurance to include other investment products. “The market has become sophisticated in that we have seen a growth in the number of asset managers who have come to the country,” she said. “The first provider of these unit trusts was African Alliance in 2002.” One of the asset classes that Ngope talked about is mutual funds which she said are a connected investment scheme by definition.
“Basically you are putting your money together with the money from other classes in order to get economy of scale and to be able to invest in other asset classes that you wouldn’t be able to invest in if investing on your own,” she said. She disclosed that StanChart has partnered with international providers of such mutual funds which will allow clients to invest in a wide range of international currencies available.
“There are a number of benefits, the first one being flexibility,” she said. “Mutual funds don’t have a restrictive period. If you invest your money, whether as a lump sum or monthly, at a certain point determined by a client, withdrawal can be made without penalties.” This is because mutual funds are not fixed products but pure investment products. “At any point in time, you always know where your money is invested, geographically and in terms of the asset class,” Ngope said. However, she noted, even though their mutual funds are offshore-based, the Non-Bank Financial Institutions Regulatory (NBFIRA) still regulates them.
“They still make sure that we partner with only reputable companies that are properly regulated in their own jurisdictions,” she explained. Bonds are another asset class that the bank has made available to its affluent clients but these are currently offered offshore. Ngope said future StanChart will be able to offer its clients an opportunity to invest in local government or corporate bonds in the near future.
