Stanbic IBTC begins dollar fund public offerings

Following approvals by the regulatory authorities, two new products – the Stanbic IBTC Dollar Fund (SIDF) and SIAML Pension ETF 40 have officially opened for subscription.Stanbic IBTC Asset Management Limited (SIAML) acting as the fund manager for both funds.

The Stanbic IBTC Dollar Fund provides retail and institutional investors the opportunity to seek exposure in attractive dollar-denominated securities.
This would serve as a hedge against devaluation as well as optimize returns on investments.On the other hand, the SIAML Pension ETF 40 is an Exchange Traded Fund (ETF) that will track the Pension 40 Index (Pension Index), replicating as closely as possible the total return of the NSE Pension 40 Index.

The Index, launched last year by the Nigerian Stock Exchange to drive market optimisation, is a tracking mechanism for investors, particularly institutional investors like Pension Fund Administrators (PFAs). The NSE Pension Index monitors the top 40 most capitalized and liquid companies in the market.

The Chief Executive Officer of SIAML, Bunmi Dayo-Olagunju, said the initial public offerings (IPOs) for units of both funds opened on Monday, September 26, 2016 and will close on Wednesday, November 2, 2016 while the signing of the enabling agreement by the various parties to the transactions took place on Tuesday, September 6, 2016.

Under the terms of the deal, the parties agreed to proceed with the solicitation of offers for 5,000,000 units of theStanbic IBTC Dollar Fund (SIDF) available at $1 each and multiples of 500 units thereafter.

Dayo-Olagunju explained that the Stanbic IBTC Dollar Fund was launched based on the need to spur the preservation and appreciation of wealth. “We believe that even in these volatile times, the Fund will foster the diversification of portfolios and investments in currency terms, which in turn will help in the preservation and appreciation of wealth for investors,” she said.

In the offering for the SIAML Pension ETF 40, according to him, there will be 10,000,000 units available for subscription at N=100 each at par and multiples of 10,000 units thereafter.The Fund has an offer size of N1 billion.

Dayo-Olagunju added that the SIAML Pension ETF 40 would provide investors access to the most liquid publicly quoted companies on the Nigerian Stock Exchange that are compliant with the regulatory requirements for investing pension assets in terms of taxable profits, free float, dividend, sector and individual stock weighting.

“The SIAML Pension ETF 40 is designed as an instrument of choice for PFAs, Life Assurance companies, institutional investors, as well as foreign portfolio managers who are desirous of the Nigerian exposure with minimal liquidity and exit risk,” Dayo-Olagunju stated.

Highlighting some of the benefits of the ETF, Dayo-Olagunju said it would provide investors with a strategic exposure to the equities market, allowing for flexibility, cost effectiveness, diversification of investment, as well as liquidity. She added that it would act as a benchmark for PFAs to measure performance and report same to Retirement Savings Account (RSA) holders.