Stanlib launches Bond Index Tracking Fund

Mar 20, 2015

Investors can get some bond exposure through the fund.

South African Investment company Stanlib has launched its first Bond Index (ALBI) Tracking Fund, a unit trust fund aimed at investors who want some bond exposure.

In a statement, the company said that changes to the method of calculating indices now make them appropriate for index funds, where previously bond indices included illiquid assets and were not replicable. "For this reason, bond index funds are a relatively new phenomenon in South Africa, but are poised for growth."

The Fund is a long-term investment aimed at investors with a time horizon of a minimum of three to five years. Stanlib said it is suited to conservative investors with a low risk appetite and is fully allocated to domestic bonds.

This comes a few weeks after the African Development Bank (AfDB) and Bloomberg to launched the AFMISM Bloomberg® African Bond Index.

Calculated by Bloomberg Indexes, this composite index includes the Bloomberg South Africa, Egypt, Nigeria and Kenya local currency sovereign indices, considered as the four most liquid bonds in Africa. It also includes three sub-indexes for different maturity ranges.

"The launch of the indices comes as a welcome development at a time when African countries are increasingly looking to domestic capital markets to source much needed financing for economic development," said Stefan Nalletamby, Director of the Financial Sector Development Department at the AfDB.ADNFCR-2976-ID-801780525-ADNFCR