STANLIB has launched two new Africa equity UCITS III funds, highlighting the continent's case in portfolio diversification.
The Standard Bank's asset management arm has unveiled the Standard South Africa Equity and Africa Equity funds.
It says while the MSCI Emerging Market Index fell 12.3% since 20 July – African markets, excluding South Africa, rose on average by 1.28%.
The Africa fund invests in up to 16 equity markets, with initial major holdings in Egypt, Morocco, Nigeria and Kenya as well as minor markets, such as Botswana and Ghana.
Managed by STANLIB’s Africa investment head John Mackie, the fund will typically invest in 45 to 60 shares.
The Richard Middleton-managed South Africa Equity fund will target returns of 4% above the Johannesburg exchange all-share index, with a 40 to 50 share portfolio.
Domiciled in Dublin, both funds have a $50,000 minimum investment, a maximum 5% initial charge and a 2% annual fee of which a trail fee can be paid to IFAs.
Standard global investment marketing director Dylan Evans says Africa has increased in significance since the current global volatility began.
“Most African nations are now stable, most have reduced their debt to manageable proportions or in many cases, eliminated it entirely and most have seen their inflation and interest rates fall to levels which are in line with emerging markets in general,” he says.
“As a result, Africa has been growing faster than the OECD average since 2001 and African equity markets have been outperforming developed market equities.”
Evans says few international investors seem to have realised the continent’s strong growth.
“Africa is unquestionably an excellent way to diversify an international portfolio,” he says.
“Despite prevalent misconceptions about Africa, an investment in African equities can actually help reduce portfolio volatility.”
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