Africa Funds Lesotho

What is the STANLIB Lesotho Income Fund?

The STANLIB Lesotho Income Fund is a unit trust fund that aims to obtain a reasonable level of current income while maintaining maximum stability for capital invested. The fund invests in fixed income securities (i.e. bonds) and other non-equity securities like financially sound preference shares, debenture stock, debenture bonds, and other securities in the Common Monetary Area (CMA).

The STANLIB Lesotho Income Fund has been specifically developed to meet the growing demand for conservative income solutions in Lesotho.The STANLIB Lesotho Income Fund only invests in instruments issued by credible institutions and measures are in place to prevent over exposure to any one institution. This restriction presents the foundation for the diversification that this fund offers. The STANLIB Lesotho Income Fund is allowed to invest in Government issues of the Republic of South Africa, Kingdom of Lesotho, Republic of Namibia and Kingdom of eSwatini as well as corporate issues of companies domiciled or registered in the CMA region.

The fund is managed by a team of skilled and experienced fund managers whose industry experience provides synergistic benefits to investors by giving them direct access to the expertise and experience of one of Africa’s leading fixed income teams. The weighted average maturity of this portfolio may not exceed two (2) years, and the portfolio may not have any direct/indirect foreign exposure.

Who Should Invest?

The STANLIB Lesotho Income Fund is suitable for those investors who are looking for a conservative investment solution that aims to maximise their income while maintaining capital stability.

The STANLIB Lesotho Income Fund also appeals to those investors that require a relatively liquid investment that provides exposure to fixed interest instruments across the CMA region. The STANLIB Lesotho Income Fund may suffice as a stand-alone investment solution or form part of a diversified portfolio of investments.

The fund is suitable for investors who:

Require a low risk income fund with regular income declarations

Seek reasonable levels of current income and maximum stability for capital invested

Require a potentially higher yield than money market over the medium term

Why Invest in the STANLIB Lesotho Income Fund?

The economies of scale achieved through pooling of investments enables the STANLIB Lesotho Income Fund portfolio manager to purchase higher yielding instruments that individual clients and medium sized corporates and institutions would not normally have access to.

The STANLIB Lesotho Income Fund provides a stable environment in which investments can be housed and the quarterly distributions could supplement investors’ income. Investing in the income class offers other distinctive advantages:

Fixed income investments closely simulate cash, but often give a higher return than cash
It is a highly liquid asset class with a low risk of capital loss
It provides a solid and consistent income stream

The Lesotho economy is also benefiting from this fund through the fund’s investment in local securities (minimum 15% as prescribed by the law) and the subsequent capital market development, at a time when it is imperative to develop a capital market to fund Lesotho’s economic and infrastructure development plans.

Investment Amount

Minimum Initial Investment Amount
Minimum Monthly Debit Order
Minimum Repurchase Amount
Minimum Account Balance

Fees structure
‍
‍Initial Fee
‍

Annual Management Fee

M 15 000 Or
M 1 000
M 2 000
M 15 000

Nil (institutional investors)*
1.50%
‍
1.00% per annum(institutional investors)*1.25% per annum (retailinvestments)*

The STANLIB Lesotho Money Market Fund is a unit trust (collective investment scheme) fund that aims to maximise income while preserving capital over the medium term, and to ensure liquidity of funds invested. It invests in a wide range of highly marketable short-term debt securities, which include short-term government securities like treasury bills, corporate financial instruments such as bankers’ acceptances, negotiable certificates of deposit (NCDs), commercial paper and other debt securities issued by South African and Common Monetary Area governments and banks (Lesotho, eSwatini and Namibia). Interest is calculated daily and paid at the end of each month.

There is currently a great demand for alternative cash products in Lesotho, and this fund is ideally positioned for investors who are looking for investment returns that are stronger than local bank deposits with the convenience of a call account.

The fund caters for corporates, institutions and private investors who have cash available to invest over the medium term, who require the flexibility to withdraw funds at relatively short notice.

This fund is suitable for:

Investors who require a wholesale interest rate on cash

Short-term investors requiring a ‘parking bay’ for their cash

Investors who require low-risk, secure investments with yields in excess of traditional banking products

See more information about STANLIB’s Collective Investment Schemes in the tab below.

In the past, investors have relied on savings accounts as a saving vehicle for a home purchase, children’s education, retirement or for emergencies. Investors now have the opportunity to utilise the STANLIB Lesotho Money Market Fund for all their savings needs, at higher yields on cash deposits than traditional savings accounts and term deposits.

The economies of scale achieved through pooling of investments enables the fund manager to purchase higher yielding instruments that individual clients and medium sized corporates and institutions would not normally have access to through traditional savings and normal bank deposits. The fund also gives investors direct access to the expertise and experience of one of Africa’s leading money market investment teams.

Minimum Initial Investment Amount
Minimum Monthly Debit Order
Minimum Repurchase Amount
Minimum Account Balance

Fees structure
‍
‍Initial Fee
‍

Annual Management Fee

M 15 000 Or
M 1 000
M 2 000
M 15 000

Nil
‍
1.00% per annum (retail investments)*0.5% per annum (institutional investors)*

The Lesotho economy is also benefiting from this fund through the fund’s investment in local securities (minimum 15% as prescribed by the law) and the subsequent capital market development, at a time when it is imperative to develop a capital market to fund Lesotho’s economic and infrastructure development plans.

What is the STANLIB Lesotho equity Fund?

The Fund is a unit trust that aims to obtain steady growth of income and capital, a reasonable level of current income and the maximum stability for capital invested. The Fund invests in securities, non-equity securities and participatory interest of collective investment schemes in securities.

Who Should Invest?

The Fund caters for corporates, institutions and private investors who have cash available to invest over the medium to long-term.

This Fund is suitable for investors:

Seeking steady long-term capital growth

Typically have an investment horizon of more than five years

Investors who require returns commensurate with medium to high risk

Why Invest in the STANLIB Lesotho EQUITY Fund?

The Fund is a general equity fund whose objective is steady growth of income and capital; and can be used primarily as the equity building block for a portfolio.

The Fund combines value and growth and is effectively style agnostic, meaning it has a mandate that is not restricted to any specific investment style. Using a bottom-up stock picking approach, the Fund can invest in both local and offshore equities (up to a maximum of 25% offshore and 5% in Africa excluding SA).

The Equity Team’s primary objective is to grow and preserve capital over a long-term period. As such, the team:

Is benchmark conscious with a tracking error of 3 to 5%
Uses the STANLIB research team as its primary input for stock selection
Invests in companies that are growing earnings above the market, generating economic profit, distributing cash and are attractively valued

Investment Amount

Minimum Initial Investment Amount
Minimum Monthly Debit Order
Minimum Repurchase Amount
Minimum Account Balance

Fees structure
‍Initial Fee
Annual Management Fee

M 15 000
M 1 000
M 2 000
M 15 000

5%
1.5%

What is a Collective Investment Scheme?

Collective Investment Schemes are investments where investors’ funds are pooled and managed by professional portfolio managers.

Investing in shares has traditionally yielded unrivalled returns, offering investors the opportunity to build real wealth. Yet, the large amounts of money required to purchase these shares are often out of reach for smaller investors. The pooling of investors’ funds makes Collective Investment Schemes the ideal alternative, providing cost effective access to a wide variety of local and international shares / equities (companies listed on a stock exchange), bonds, and money market instruments such as fixed deposits, treasury bills and call accounts.

Pooling enables investors to reduce transactional costs involved in buying and selling of securities and gives investors the ability to negotiate for better returns than they would get if investing individually.

Safety and transparency

The collective investment schemes industry is strictly regulated by the Central Bank of Lesotho Collective Investment Scheme (CIS) Regulations, of 2018. The regulations allow the investor to enjoy total transparency of fees, charges and investment performance.

However, the Central Bank of Lesotho does not take any responsibility for the financial soundness of a scheme for correctness of any statements made or opinions expressed in this regard.

Tips for successful investing:

Identify your goal (these should be realistic)

Establish a time frame

Identify your level of risk based on your current responsibilities

Understand the volatility of return associated with different investment types

Shares are usually identified as having the potential for the highest return of all the investment classes, but with a higher level of risk i.e. share investments have the most volatile returns over the short term.

An investment of this type of asset should be based on the investors’ objectives but it is recommended that it be viewed on a medium to long-term horizon e.g. over five years.

‍Property
Property yields are normally stable and predictable as they comprise many contractual leases, the rentals of which are passed through to investors.

Property share prices however fluctuate with supply and demand and are counter cyclical to the interest rate cycle.

Property is an excellent inflation hedge as rentals escalate with inflation, ensuring distribution growth, and property values escalate with inflation ensuring net asset value growth.

‍Bonds
Bonds generally have a lower risk than shares because the holder of a bond has the security of knowing that they will be repaid in full by government authorities. Corporate bonds can also be included and have a slightly higher risk than government-issued bonds. An investment in this type of asset should be viewed with a 3 to 6 year horizon.

‍Cash
Cash is generally regarded as the safest investment. Whilst it is theoretically possible to make a capital loss investing in cash due to the effects of inflation etc., it is highly unlikely.

Due to its stable nature, cash has a relatively low return in comparison to the other investment classes. An investment in this type of asset may be viewed with a horizon less than 3 years.

‍Equity Portfolios
These portfolios invest in selected shares across all the industry sectors of Stock Exchanges and offer medium to long-term capital growth as their primary investment objective.

Balanced Portfolios
Balanced portfolios invest in a wide spread of investments in the equity, bond, money markets and aim to provide capital appreciation together with interest income over the medium to long-term.

Fixed Interest Portfolios
Fixed Interest Portfolios invest in bonds, money market instruments and other income earning securities and aim to provide interest income over the short to medium-term. They also provide the opportunity for capital growth.

Fund Name	Quarterly Commentary	Comprehensive Factsheet
Lesotho Unit Trust Fund
STANLIB Lesotho Equity Fund
STANLIB Lesotho Income Fund
STANLIB Lesotho Money Market Fund