GhanaInvestment InsightsMulti-asset strategy

23 May 2022

IC Big Ideas: Fortune favours the bold

In brief

  • The Russian-Ukraine war has exposed Ghana to new economic threats and intensified external headwinds
  • Commodity price hikes globally have fuelled local inflation amid a currency blowout; the Ghanaian Cedi is witnessing its worst performance since December 2015
  • Local financial markets continue to struggle as yields remain elevated with rates on both local currency and foreign currency treasury securities up by an average of 200bp and 450bp respectively since the year open
  • Despite the challenging economic backdrop and a significantly volatile outlook, we believe compelling opportunities exist
  • We are convinced that in light of the ensuing apprehension across the markets, investments in structured quasi-government products will offer the best risk-adjusted returns in the near-term while gold-linked securities such as the NewGold ETF presents the best opportunity to generate alpha
  • For the medium-term, we see several opportunities across the various businesses we operate
  • We believe an exchange-traded fund approach to investing in alternative assets is the best tactic to take advantage of the increased allocation of pension assets to alternative investments
  • As institutional money continues to tip the pricing scale lower, several asset managers are diversifying more into retail investing but the brick-and-mortar distribution era is over
  • A tech-enabled approach through strategic partnership with financial technology companies provides unlimited scale at a cheaper operating expense to the asset manager
  • For the FinTech, it offers a new growth path as the ability to add investment options to their existing boutique of services (i.e. payments, remittances and trading) enhances annual recurring revenue
  • In our maiden edition of IC Big Ideas, we invite you to explore the potential sources of attractive returns as we identify investment opportunities that will spur the next cycle of growth

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