Stanbic IBTC bank, through its money market fund, is promising investors a chance to invest in a short-term stable and low-risk portfolio.
The goal of the fund is to serve the twin needs of most Nigerian investors: stable income generation and capital preservation.
There are many other financial institutions offering different mutual funds, with varying asset compositions, So, why Stanbic IBTC money market fund?
Well, in this article, we’ll take a look at what the Stanbic IBTC mutual fund entails and what type of investor would be the right fit.
What Is the Stanbic IBTC Money Market Fund All About?
The Stanbic IBTC Money Market Fund is a unique type of mutual fund in Nigeria that is targeted at investors who want to generate stable cash flow while keeping their capital safe.
While this mutual fund can be grouped as a short-term portfolio, it is strategically targeted at investors looking to stay invested by holding paper assets for the long-term.
This mutual fund is composed of stable short-term securities such as treasury bills, fixed deposits, and commercial papers with minimum rating of BBB.
Stanbic IBTC boasts that their money market fund features convenience, diversification, flexibility, and security.
The fund can be accessed via multiple channels and investors enjoy transaction flexibility with a portfolio that is 100% invested in a group of diversified but stable asset classes.
How to Invest in the Stanbic IBTC Money Market Fund
To start investing in the Stanbic IBTC Money Market Fund, you can check in at any of the Stanbic IBTC bank branches nationwide.
Alternatively, you can start investing by opening an account online via their instant account channel and select the mutual funds account.
You will need a government issued identity card, a passport photograph, and a proof of address to open the account.
The minimum investment amount for this mutual fund is 5,000 Naira, while the minimum investment tenure is 30 days.
How Much ROI Does Stanbic IBTC Money Market Fund Offer?
As most mutual funds, there is no guarantee of specific ROIs to be earned by investors.
But realistically, investors should expect ROIs between 5% and 10% per annum, as that is the average YTD return obtainable industry-wide.
What I Like About Stanbic IBTC Money Market Fund
I particularly like the choice of assets in their portfolio.
Treasury bills, fixed deposits, banker’s acceptance, commercial papers, etc.
These are pretty much safe financial instruments with a history of providing stable returns for investors.
So, if for anything, this money market fund is definitely one for capital preservation.
What I Dislike About Stanbic IBTC Money Market Fund
The Stanbic IBTC Money Market Fund is a pretty decent portfolio, and there isn’t much to dislike about it.
However, the penalty for redeeming your capital within the holding period is quite steep. A whopping 20% on the accrued income.
This might be an industry specific penalty rate for most mutual funds in Nigeria, I’m not sure.
But I suppose that most investors would rather just use their money market fund certificate to collect loans as made available by Stanbic IBTC.
But then the choice would be between paying interest to service a Stanbic IBTC loan or losing 20% of accrued interest on your money market fund, whichever is less.
It’s the investor’s choice to make.
Can You Lose Money With Stanbic IBTC Money Market Fund?
This is quite a very safe mutual fund, and I see no way that investors can lose their money.
Also, investors can easily collateralize their money market fund, which is a great way to turn risk into opportunity.
So, if you want to get creative with investing while keeping your funds safe and stable, this might just be the investment for you.
Should You Invest in the Stanbic IBTC Money Market Fund?
The Stanbic IBTC Money Market Fund is definitely one to look out for.
I particularly think it is a great portfolio for long-term investors even if not specifically stipulated by Stanbic IBTC.
So, if you are looking to save for the long-term, this could be a great way to do so, while earning passive income on the side.
I’ll definitely be keeping an eye on this mutual fund towards future opportunities for investing.