The Stanbic IBTC Bond Fund is promising investors a stable way to invest their money and earn passive income for the long-term.
As one of the most innovative financial institutions in Nigeria, Stanbic IBTC has become the go-to bank for people looking for ease of banking.
Via their Bond Fund, the bank is looking to attract investors who have a medium risk appetite but looking to stay invested for the long-term.
In this article, we’ll take a look at different aspects of the Bond Fund to ascertain what type of investor is the right fit.
So What Is The Stanbic IBTC Bond Fund All About?
The Stanbic IBTC Bond Fund is a type of mutual fund that is designed to help investors achieve competitive returns on their capital while keeping the risk as moderate as possible.
The bond fund invests in high quality bonds and money market instruments. According to Stanbic IBTC, a minimum of 70% of the fund goes into high performing bonds while the remaining 30% goes into other instruments such as treasury bills.
How to Invest in the Stanbic IBTC Bond Fund
To invest in the Stanbic IBTC Bond Fund, you can visit any of Stanbic IBTC bank branches nationwide to register an account.
Alternatively, you can log on to the Stanbic IBTC fund management portal to register an account to start investing.
The minimum investment amount is 5,000 Naira, the same as the subsequent investment or top up amount.
The minimum investment tenure or holding period is 91 days which equals about 3 months.
The current price of the Stanbic IBTC Bond Fund as at January 2023 is 245.15 Naira per unit.
How Much Interest Does The Stanbic IBTC Bond Fund Offer?
Stanbic IBTC is promising investors a competitive rate, as there is no guaranteed ROI benchmarked for the Stanbic IBTC Bond Fund.
However, investors can take a cue from the recent performance of the bond fund to make a projection of the probable ROI.
Stanbic IBTC Bond Fund Performance as at January 2023
- Previous 30-day ROI: 0.34%
- Previous 1-Year Return: 4.00%
- Previous 5-Year Return: 38.93%
From this, investors can project an average ROI of 4% per annum for the Stanbic IBTC Bond Fund.
What I Like About The Stanbic IBTC Bond Fund
Personally, the most significant advantage of the Stanbic IBTC Bond Fund is that it is invested in very stable instruments.
It’s a good way to invest for people looking to invest large sums for the long-term while expecting returns higher than the regular savings account.
However, I daresay that there are better options out there to earn more returns on your money.
What I Dislike About The Stanbic IBTC Bond Fund
There is almost nothing to dislike about the Stanbic IBTC Bond Fund because it is designed for a specific type of investor.
The bank offers other types of funds which could match the needs and tastes of different investors.
However, if I’m pressed to criticize this fund, I’d say that the ROI isn’t just good enough for a greedy investor like me.
If I’m to put my money in a Naira based fund, it should give me a specific guaranteed return.
Otherwise, I’d throw it into a dollar fund that gives the same average of 4% return.
But then a critical look at this bond fund will show you that a 38.93% return in 5 years averages almost 8% return per year.
I’ll say that 8% return for 5 years is a pretty impressive return for most investors, especially those investing with large sums.
Can You Lose Money With The Stanbic IBTC Bond Fund?
It looks unlikely.
With the bulk of the fund invested in pretty stable instruments like bonds and treasury bills, investors’ minds should be at rest.
But that doesn’t mean that depreciation cannot happen.
However, your analysis should be based on the performance of the fund over the last few years, which seems quite impressive and reassuring.
Should You Invest in The Stanbic IBTC Bond Fund?
Definitely.
It’s an option.
I see the Stanbic IBTC Bond Fund as a way to save and invest towards projects in the future.
If you are looking to start a project in one or two years time, then putting money together via the bond fund is a good option.
Instead of leaving that hefty project fund in your savings account, it would be better to lock it up in the Stanbic IBTC Bond Fund while topping it up towards the project commencement date.